Upgrading question (custom templates. phrases etc.)

Quote from Moonclamp

[…] will I lose my custom templates and phrases?

No, these will remain, but some phrases may be automatically disabled if their original value was changed. There is a system in place that will track those automatically disabled phrases in 3.1, so this should come in handy to find these phrases.

Quote from Moonclamp

Also, how will upgrading affect custom styles I've created by duplicating the default theme?

They are left untouched and will automatically enter the style compatibility mode.

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In general, I would like to suggest that you set up a copy of your site and try the upgrade there to see if everything is working as expected.