A battery with the new 26120 cells cannot have the same format of the 100s4p 21700 battery. The existing packaging space will not accept 2x120mm instead of 2x70mm wide, and given it must be a multiple of 100 cells, it would then probably only be 1p which likely results in a lot less than 7.2kWh.
The 120mm cells will likely only be used on the street and adventure bikes (and possibly later other Eicher group bikes), which have a frame wide enough to accept 2x120mm wide instead of the Varg's 2x70mm wide.
I think the point is that 26120 cells more or less fit with current case dimensions with one row instead of two, which is pretty much the point.
Then yes probably 2 rows for adventure bikes, which would still be way better than... '4 rows with 21700! With 4 rows you'd get 2 rows not connected on any side to the case, they'd never get air cooled.
Indeed change from Varg 1.0 to 1.2 is modest, hence why it's 1.2 instead of 2.0.
But I believe whenever they'll upgrade the battery they'll keep their upgraded batteries as close as possible for the entire motorcycle range, that is using same individual cells for all models (like MX1.2, EX and SM), likely in different packs for different applications like 9 kWh Varg and 14-18 kWh adventure bike and so on. It simplifies logistics so much.
It would be super cool from Stark to offer the possibility to upgrade old bikes with new battery (like when they'll switch from 21700 to 26120) but it might not be worth it for them.
My hope is more that if the market grows sufficiently, aftermarket will develop and independent actors will step in to offer their own battery upgrades, refurbishing, conversions and so on. The kind of stuff you can currently do for some electric cars, and of course the huge Surron upgrades aftermarket.