Background

Each profile folder has a file named compatibility.ini that records information about the updated status of the files in that folder. If you rolled the version back from, say, Firefox 131.x to Firefox 128.x, then as you noted, Firefox 128.x will not try to use upgraded profile files and instead will prompt the user to create a new profile.

If the user has been using Sync, much of their data should transfer to the new profile after they sign in. But some files might need to be transferred manually, assuming they are downward compatible with Firefox 128.x (Recover important data from an old profile).

Available Options

You could test whether it is safe to downgrade the user's existing profile. See: https://support.mozilla.org/en-US/kb/dedicated-profiles-firefox-installation#w_what-happens-to-my-profile-if-i-downgrade-to-a-previous-version-of-firefox

Whether you can push that out using Policy, I don't know.

To be clear, are you downgrading from 132 to 128?

See this post:

https://support.mozilla.org/gl/questions/1320829

You can set the environment variable MOZ_ALLOW_DOWNGRADE to allow this.

no the issue is occuring on devices being upgraded from older versions 95 and up. we had over 90 versions of Firefox in the enterprise.

It definitely shouldn't happen with older versions. I think MOZ_ALLOW_DOWNGRADE is definitely the way to go.

By the way, if this happens not when opening Firefox 128 ESR but at a daily interval, it could be caused by some issue with the default user agent Scheduled Task. https://old.reddit.com/r/firefox/comments/1go8n0h/this_profile_was_last_used_with_a_newer_version/