I might be going well 'off reservation' with these answers, but here goes...
I guess there is no real need to upgrade to the latest software unless you want something that comes along with the upgrade (think cards, auto seats, auto indicators etc). Having said that, I believe Tesla will always want you on the latest software when they start any trouble shooting - its probably in their T&Cs (I know it is in our software!). If you have the update setting on Standard, in theory you'll get it later than others, so if there is a real 'gotcha', you can avoid it as long as you want.
I don't think anyone outside Tesla themselves know exactly what code is running where and on what cars - I'm not even sure another 2020 MP3 like mine has exactly the same software - logic says yes, but, Tesla... My understanding is that radar has been disabled on all cars with recent software - TACC/Autosteer etc is Vision based only now.
I believe the Auto High Beam and Rain Sensor have always been camera based - radar was only for TACC/AutoSteer (with USS for slow manoeuvring and parking).
For what it is worth, on my 2020 M3P, I have the latest software and I would say TACC/AutoSteer is generally better than it has been, Auto High Beam has improved, and the wipers are much the same as the always have been (I'm lucky, I think mine have been pretty good!). I also think the additions (as mentioned above) have generally improved the car.
I'm sure others will put me right on the above (thanks in advance), and as usual, your mileage may vary.
The one consistent thing about Tesla cars is they all seem to be kind of unique!