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I think you should do it in 1 update because it would as you have said break mod compatibility.  I personally have 200 mods and waiting for them all to update would mean a very long wait indeed.
Or that you could add in the option to stay on the currect version of the game through the "betas" feature for at least a few weeks while mods are updated and release it in 2 updates.

I think so. A) You have Zhentar's fork of ILSpy making it way easier to view the game's code (so less guesswork) and B) They already said they're getting some help directly from Ludeon.

If that's true then my respect for Ludeon just quintupled.