In the past, Microsoft would automatically upgrade the configuration version of the virtual machine, as part of the Hyper-V host upgrade process. However, Microsoft has now decoupled the upgrade process of the VM in Windows 2016, into a separate manual task, from the upgrade process of the host.
Note
Note, the configuration version represents the versioning of the VMs associated metadata, for example the VMs actual configuration state, any related saved state, and snapshot files.
By not automatically upgrading the configuration version, you can easily move a VM between different versions of Hyper-V. Now, if you need to move a VM bi-directionally between Windows 2012 R2 and Windows Server 2016, you can.
Microsoft has committed to ensuring that if you choose not to upgrade the VMs configuration version, everything about the VM remains backwards compatible, including things like saved states and checkpoints. So what compels you to upgrade the VM configuration...