The builds now are official (no test builds).
However, using LineageOS you are using OS builds which are being built automatically without a beta tester process before release. Things can break, no guarantees.
Most of the time LineageOS is running just fine, but Fairphone OS and Fairphone Open OS in comparison are being tested by beta testers before releases, so I would consider them more stable in the sense of the term.
Experiences differ. There are users for whom upgrading went through without losing anything … and there are users who got stuck and had to wipe their phone.
Make a backup of all your important data and be prepared.
My personal opinion is that in general it’s better to install the phone from scratch when upgrading the major Android version, and I know it means investing time and work.
But if something doesn’t work out, there’s one less question to ask … Could just upgrading the existing installation instead of installing from scratch have caused the problem? (Answer to this mostly is: Yes, making troubleshooting more complicated.)