One challenge we have with Lua in Mudlet (FOSS text-based MUD client, think something akin to Roblox but for text) is that all of the player-created content is on Lua 5.1, and upgrading to 5.5 would be a breaking change for most.
Has anyone solved an ecosystem upgrade like this?
You're probably better off finding a way to support both.
Is transpilation a thing in the Lua world like it is for JavaScript?
Do you have any reason to upgrade to 5.5?
Many people still use 5.1 because that is already a complete language that works fine. Most people don't really need the new features. Plus if you stay on 5.1 you get compatibility with LuaJit and Luau so much better performance.