First thing the only thing needed to update should be trimming the sleep times. Might have to enable the plugin in Krypton, dont know how the upgrade will work with installed addons.
As I understod it, Krypton upgrade will just be a “normal monthly upgrade”. Which would mean that it would not remove none “OSMC” things from the system. So your Xwindows and apps shouldn’t be affected. But I’ve never regretted doing a back up . On a clean Krypton install you just run my installer and enable the launcher-addon.
On Krypton RC I’ve got the sleep time down to about 3 secs from clicking launch in kodi till i get the splashscreen. But still I run a really clean install just a few addons, like youtube, swedish public domain TV, Internet radio player