It happens very regularly. Often, what I hear—and I take my dog all over the world with me—is, “We would have left you enough space; however, the flight is fully booked and we can't take the space away from a person for a dog.”
I continue to remind people that this is not a pet; she is my guide dog. Although she is a dog, she is still a living, breathing creature, and folding her like a piece of luggage is not acceptable. It still happens quite often.