As far as I’m aware, the Android emulator doesn’t natively enable simulating OS upgrades. This is so because unlike a physical device, which can download and install system upgrades, an Android emulator is made to emulate a specific Android OS version only.
Priyanka’s answer explains the various scenarios well. The app will get uninstalled without any warning. If the app was installed from Play Store then, after the update, the OS will likely try to update to a newer version of the automatically (if available). This is what we usually see on real devices after an OS update, as it installs various app updates post OS update.