OK, I went with this new text. There is confusion over install vs copy, and whether this is happening at the operating system level or the SQL level. I tried to clarify that, but I am not sure I was successful. I also used the word "extension" since this is more common than "custom".
Much better, however I'm unclear on whether CREATE EXTENSION is actually executed on the upgraded server.
From what I could gather it is not, otherwise the new function definitions should have been in place.
I think what happens is that the function definitions are copied as part of the schema and pg_extension is also copied.