The upgrade is simply a purchasing price deal. If you already own either version of the previous kids, you can buy at the upgrade price. During installation, the installer checks to see if you have the required mesh installed (so it's important to make sure you have the Mil Boys/Girls currently in your runtime!) The old files are not overwritten, so you end up with your existing versions as well as the new ones. Laura will take some of V3's injections straight out of the box, if she has channels which are named the same. She will not take, for example, the Voluptuous morph. I assume Luke/M3 are similar, but haven't experimented.

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"you are terrifying
and strange and beautiful
something not everyone knows how to love." - Warsan Shire