The issue is our current databases were not designed for proper schema resolution.

The correct answer here is that a database ought to be modeled as a data type. Sql treats data type changes separate from the value transform. To say this is retarded is an understatement.

The actual answer is that the schema update is a typed function from schema1 to schema2. The type / schema of the db is carried in the types of the function. But the actual data is moved via the function computation.

Keeping multiple databases around is honestly a potential good use of homotopy type theory extended with support for partial / one-way equivalences