Hi,
When you are doing a major upgrade (1.x to 2.x version) or expanding the system, after the upgrade/expansion is completed, you will get 180 days of grace period which will allow you enough time to obtain and apply upgraded/re-hosted licenses.
UPGRADE:
When you order the upgrade media using Product Upgrade Tool, you also have an option to order upgrade of licenses. Once you get that PAK number for the upgraded licenses, once your system is upgraded, you will generate new licenses request and use this new PAK number and request new set of licenses (the same count as on previous version). Licenses will then issue you a new licenses file with the same count as you originally had installed just for this new version you upgraded to.
You then use this new licenses and install it on the system, while your original licenses that were installed on previous version will be ignored.
EXPANSION:
Since expansion includes deployment of a completely new larger system, and then transfer of data, your System ID will change. In that scenario, you again have 180 days of grace period to rehost the licenses. In this scenario, you just use your old PAK number and use license request from the expanded system and request Licensing team to re-host the license for you. Once you get this new license file, you install it, and your system continues using permanent licenses.
I hope this explains the process a little bit more.
Kind regards,
-Dejan