CRUX

pkgadd -u removes files if they don't exist in the new package, regardless of the rejection rules in pkgadd.conf.

As a test I create package for app-1.0 with /etc/app.conf, and then app-2.0 without it:

[root@koji ~]# mkdir etc
[root@koji ~]# echo default configuration > etc/app.conf
[root@koji ~]# tar -czf app#1.0-1.pkg.tar.gz etc
[root@koji ~]# rm etc/app.conf
[root@koji ~]# tar -czf app#2.0-1.pkg.tar.gz etc

I will install app-1.0, and then customize my configuration file:

[root@koji ~]# pkgadd app#1.0-1.pkg.tar.gz
[root@koji tmp]# cat /etc/app.conf
default configuration
[root@koji tmp]# echo customized configuration > /etc/app.conf

Now I will upgrade to app-2.0, and my custom configuration file will be gone:

[root@koji tmp]# pkgadd -u app#2.0-1.pkg.tar.gz
[root@koji tmp]# ls -l /etc/app.conf
ls: cannot access /etc/app.conf: No such file or directory

My pkgadd.conf contains:
UPGRADE ^etc/.*$ NO