It does, but this was not during my upgrade. I am still inside my '2 year contract', my upgrade date stays the same (this October) but my contract now instead of ending in October doesn't end until March. So I extend my contract by 5 months but am saving over $30 a month from what I was paying, so over this year I will save $360 on my plan. I can still upgrade in October with a subsidized phone and my plan stays the same, but would obviously extend for 2 more years.
However, if for some reason Verizon tries to say come October I need a more expensive plan to upgrade, I'd rather buy the phone outright. Instead of $300 upfront plus $30 a month more for two years, which would add up to $1020. So no matter what it makes sense for me.