I'm thinking at this point we need something a bit more sophisticated like
ALTER EXTENSION ... UPGRADE. And the extension knows how to upgrade itself.
I’m not familiar with what hoops extensions jump through to facilitate upgrades but even if it was as simple as “create extension upgrade” I wouldn’t have pg_upgrade execute that command (or at least not by default). I would maybe have pg_upgrade help move the libraries over from the old server (and we must be dealing with different databases having different extension versions in some manner…).
Well IMHO the status quo is terrible. Perhaps you have a suggestion on how to make it better ?