So one learning for me, i.e. one of the downside of fixed length data type is, with fixed length data types any future changes to it , will be a full table rewrite. And thus this sort of change for big tables will be a nightmare.
Yes, using the wording in the documentation, there is no such thing as a "binary coercible" change for a fixed-width data type. Or for most types really. Text is one of the few for which the typmod has no meaning and there are variant spellings like varchar that allow for the underlying storage representation to be the same.