The announcement begins by referring to different versions (nightly, beta, stable, etc.) of Firefox as "installations", and then switches to "versions" halfway through. I was momentarily confused because it seems to suggest that every time Firefox updates itself, e.g. from 67 to 68, it will use a different profile.

Which it most likely won't, but one cannot be entirely sure about that assumption in a world where software updates frequently reset user settings to vendor-preferred defaults without asking.

The fact that nightly, beta, and stable really are different "versions" of Firefox (current beta becomes the next stable) makes the terminology even more confusing :(