FWIW you would still have to pay for the new phone, just in the form of the subscription fee. ATT has the same bullshit payment plan where you spread the cost of the phone over two years, but you never actually own the phone. If you upgrade, you still pay full price and you have to return your old phone.
Killing the subscription isn’t cheating subscribers out of a free upgrade, because you haven’t paid for the upgrade yet. You’re still paying off the first phone, and they bundled some of their premium services with the purchase of the phone.