Is this backwards-compatible? I.e. would existing ugly links still work?

Not currently no. Do you want them to still work? I actually didn't realize until now that prettyURLs worked fine with uglyURLs enabled and both rendered the same pages identically (at least with GitHub pages). Knowing that, I could revert disabling uglyURLs and just focus on making the canonical links on both versions point to the prettyURL version. I'd actually recommend that approach instead, no reason to burn the uglyURLs and throw off backwards-compatibility if prettyURLs work fine already, idk why I thought they didn't before.

What do you want to do?

I see now.

When uglyURLs is enabled, the .html and extensionless path equivalent (magically) work identically without specifically configuring it only on GitHub Pages for this Hugo environment (unless you are doing something idk about). Otherwise, extensionless pages are broken locally and they break when I deploy on Vercel for my demo site.

Knowing that's how the infra here works and that both path types will succeed, I left the URL structure alone and just added canonical tags for the extensionless version since it's shorter and smoother to read.