> Persistent undo exists to recover from an accidental write-and-quit mid-session nuking some stuff you really didn't intend to delete.

That's one use case, sure, but not the only possible one.

> Reading the PR the change was needed because the old undofile format was fundamentally broken.

That's a good reason to have a new undo file that's completely separate from the old one, and use the new one instead, and tell users "Hey, whatever undo information you had in your old undo file isn't accessible any more through neovim, you'll have to use vim if you need to get to it."

It's not a good reason for just deleting the old undo file with no warning. All the new version needs to do is ignore it, not nuke it.