Based on that same agreement I am also allowed to make one backup that I can use. But the thing is, the backup is not an upgraded software but rather the original.
More or less I have an idea now.
MS is just playing safe on that agreement in case you need to reformat your computer and you don't have a way to go back to the original software before upgrading again. We will definitely need the original licensed OS to get a fully functioning upgrade OS.
Anyway, I think I am just gonna keep my 7 and just upgrade my 2 Win 8 machines.