What is the “upgrade version”?

This means that the OS can be upgraded (changed to a higher version) only if it is already running a Windows OS.
If your PC already has a Windows OS when you buy it, you are eligible.
In the case of a Mac, the upgrade can be applied as an OS that runs on virtual environment software or boot camp that can run on a Mac.
Downgrading the OS is also possible, but not recommended.

Counting when using virtualization.

Regarding virtualization at the client OS, up to four virtual OSEs are allowed per license per terms of the Software Assurance (SA) privilege.