When an application is updated, typically, the older version of the package is removed from the system. The existing configuration files are generally retained, but retaining, overwriting, or writing a new configuration file with a different name is decided while creating the package.
In a typical scenario, only one version of an application is installed at a time. However, in certain cases, multiple versions of the same application exist, such as in kernel packages or in a multi-architecture environment where the same package is installed for different architectures (32-bit and 64-bit). A kernel package is designed so that multiple versions can be kept in the system. If a new installation of the kernel fails, the older kernel is always available as a standby. Always remember that the kernel package is never updated using the update option of the RPM utility. It is always installed and not updated.