If you create a new Custom Type and map it to a Kind, when downgrading, Xray will not know about this mapping and will assume it is an Unstructured Test.
For example, you create a Type called "Hierarchical Steps" and map it to the Kind Steps. When downgrading, the testers will see the Xray UI of an Unstructured Test. When changing the Test type to Manual, the data and correct UI will be shown.