I see what you mean. The Scale to Fit Area option downsizes large images but leaves smaller images untouched—regardless of whether "Only scale documents currently larger than target size" has been checked.
The following Adobe Help page strongly suggests that Scale to Fit Area should be used to produce (presumably smaller) thumbnail images. But this doesn't explain why the option to avoid scaling smaller images would be offered. This component of the command seems to be broken.
You could try submitting a bug report to Adobe regarding this issue, using their official Feature Request and Bug Report Submission form: https://www.adobe.com/cfusion/mmform/index.cfm?name=wishform
For what it's worth, the other Scale options—Scale to Size and Scale to Percentage—do seem to successfully upscale images, though they don't offer the same sizing criteria.
BTW, I tried this using multiple Fireworks versions—CS6, CS5, and FW8 (on Mac OS 10.6.8)—and none of them successfully upscaled images using Scale to Fit Area. If you submit a bug report, you might mention this, or include the URL of this discussion thread.
Have you tried batch processing using Photoshop or Bridge instead?
Thank you very much for confirming this issue.
Bridge lets you use Photoshop Actions, as does Photoshop of course, but neither let you replace the files in the same folder, unless the files are all in one folder already. I love being able to batch dozens or hundreds of files that live in different places, without doing separate batches for each folder.
I'll post a bug report. Thanks for the link.