In the setupDatabase.properties file "Production Level" is present but it does not have any impact on the upgrade process, i.e. during upgrade it will not change the production level based on the value. This property is only applicable for new installations.
To address the issue you have faced, after the upgrade open and update the Production level field on the Production tab of the System data instance (Data-Admin-System). The change takes effect (for a node) the next time that a node is started.