Actually it depends on what day you go. If you go on a day that is a black out for both passes you have to buy a Black out ticket and then can apply it to a upgrade at the end of the trip. Otherwise if the new ticket has a open day then you would probably just upgrade cause its easier.
I think because the AP is not scanned since the blackout ticket is, I think the AP is not shown as used. But honestly I can't say we have ever tried this is all the times we have used DH's AP on a blackout day (he has a lower pass then I since I go much more frequently). I think the ease of just upgrading isn't worth the extra FP's but then I hardly use FP's.