Well not to a Gmail account (since you can't change your Google account email address), but your Google account and associated purchases is not deleted: https://support.google.com/a/answer/1257646

Just set up your MX with some other service if you are not happy with Gmail, or start running your own SMTP server.

Or from free into the Paid ones - either move you pay twice.

Wait, we'll lose our purchases even going from gsuite to workspace? Is that confirmed somewhere?

I think the parent company misunderstood the process as being required to move to a new Google account. That's not the case as far as I can tell from the support document. The account remains the same, just have to pay for the service.

"How does the upgrade affect my current G Suite legacy free edition subscription?

Your current G Suite legacy free subscriptions and related services will continue to function as they do today, until you self-upgrade or we upgrade you automatically to one of the new editions."

That "until" is really ambiguous - does that mean services terminate when you self-upgrade?

No, it means that you upgrade to a paid Google Workspace account. If you don't want to pay for it you can cancel it: https://support.google.com/a/answer/1257646

If you cancel it, your account is converted to an ordinary external domain Google account AFAICT. You need to migrate your email out of Google/Gmail to get service messages over email, but you can continue using your Google account as an ordinary Gmail-like account - only difference being that you handle your email yourself (because you didn't want to pay Google to do it for you.)