1. Upgrading a product extension should not be deleting policies. If an uninstall was not done and you're able to reproduce this, I would suggest contacting McAfee Support and open a Service Request to investigate this further.
2. ePO Server 5.3 and higher has a feature that prevents policies/task/events being removed if an extension is uninstalled; see feature Policy and Task Retention.
PD25504 - ePolicy Orchestrator 5.3.0 Product Guide
https://kc.mcafee.com/corporate/index?page=content&id=PD25504
Page 195
Section: Edit Policy and Task Retention page
3. Modifying McAfee Default policies is not currently an available option/feature.