If you're using Tectonic in particular, we're certainly aiming to have a nice path. Although there are a lot of details in the term "upgrade" - it may require reprovisioning, but a lot of the idea of carrying forward Ignition is that any early OS customization you've made still applies.

If you're running a Kubernetes cluster, while Red Hat CoreOS will support automatic inplace updates just like existing CL, I'd say it's best practice to do periodic reprovisioning to flush out extra node state. For example in RHEL 7.5 we switched from devicemapper to overlayfs, but existing instances don't get automatically transitioned. If you're using k8s reprovisioning works well as all the containers just move off and then back on.