But it does not seem that “older” grub-mender-grubenv-* tools (the ones in dunfell) are able to auto-detect this behavior and hence the error.
The reverse works just fine, that is flashing a device with v1.0.0 (hddimg), and then upgrading to v4.0.0 using .mender (rootfs-image). I guess this is what is meant by that the change is “backwards compatible”.
You are correct that flashing with hddimg and then downgrading won’t work. This is because the contents on /boot/efi is permanent, and survives Mender rootfs updates. So if you try to downgrade, you still have the kirkstone layout in /boot/efi, which dunfell is not prepared to handle.
I believe you can work around it by using the /etc/mender_grubenv.config file to specify the location manually. Unfortunately it means that the two dunfell images will be incompatible: One for /boot/efi dunfell layout, and one for /boot/efi kirkstone layout. So it’s probably better to start all images with the dunfell layout and upgrade them to kirkstone, if you suspect that you need downgrades later, since then you can move seamlessly between them.