Taken from the vSphere 6.7 Upgrade Guide:
“Upgrade or install ESXi if the installer finds an existing ESXi installation and VMFS datastore.
If an existing VMFS datastore cannot be preserved, you can choose only to install ESXi and overwrite the existing VMFS datastore, or to cancel the installation. If you choose to overwrite the existing VMFS datastore, back up the datastore first.”
In other words, the fact you see an upgrade option is a good thing.
I had overlooked that information in the upgrade guide. Thank you for this information. The Upgrade went smooth and datastore preserved.