> I make some embedded "devices" as a hobby (none of it is mass-produced), and I feel like things are better now than they used to be ~3 years ago.

I guess what they meant was that sticking to old versions gives you a stable target to develop against, not that the resulting product will be stable.

Upgrading to 4.whatever would give you all the improvements, absolutely, but it would also give you all the new bugs, and mean that you have to keep up with all the refactoring that have been done since (and will be done in the future, if you plan to stay up to date).