the upgrade to Android is optional and does not have to be performed. No functions will be lost if you don't do this. However, at the same time you do without a few new functions that are only available on Android:
Better understanding of language
Ability to let Pepper navigate itself (there is a new hardware variant of the robot, for which the navigation is actually intended, but even with your somewhat older model it works)
Websites can be viewed without restriction
Pictures and videos load MUCH faster
Functions can also be purchased such as: Face recognition in compliance with data protection regulations or "Human Takeover" / "Service Call" -> a kind of Skype connection to the robot in order to be able to help a person in front of Pepper from anywhere in the world
More functions will be added (the old version will not be expanded): the remote control via the Internet will soon be available. I.e. you can load content updates from anywhere in the world onto the robot, trigger animations, let Pepper say sentences, ...
However, the following must also be considered: If you switch to Android, the connected chatbot that is running in the background can no longer be deactivated. This means that Pepper understands a lot more, but if you don't want the chatbot, you would have to disconnect Pepper from the Internet.