You have an old car, and you want to renew it. If you buy it brand new and toss the old one, you are destroying the old one. If you keep changing pieces of it, testing them to see they work, and keep going until you have replaced the whole car, it's still the old car, just brand new.
There's not much difference at the end, except that you can consider that the second way of doing things will let you still use the old car, only it'll be new.
I largely agree that gradual replacement has the far better claim to preservation of identity. I would have hardly any desire to be uploaded any other way.
However, the car of Theseus example allows for a worrisome wrinkle. What if you kept all the old parts during the process you describe, and then after, you re-assembled them? Which car has the superior claim to being identical with the old car? I think it obvious that the reassembled old parts have the superior claim over the car produced by part-by-part substitution of new parts.
I find that first intuition odd. What if we alter to situation to not involve the new parts? Simply disassemble the old car parts and reassemble them, is that a brand new old-car?
Or how about we make all the new parts plastic so that no functioning "car" is produced by the gradual part-for-part substitution. We end up with two cars, one an all-plastic car model, and one consisting of all the old parts assembled and functioning. Which has the better claim to being the old car?
Yeah, part exchanges quickly leave me with even less salient intuitions about the proper use of old identity terms than these more "splitting" oriented cases. What should we say if a lion talked and all that.
There's not much difference at the end, except that you can consider that the second way of doing things will let you still use the old car, only it'll be new.