This is what's happened at my workplace. We account for time spent working on developing new products differently that development time maintaining legacy applications. Because they are reported for tax purposes differently.
This gets really “gray”. I work on web software and we tend to deploy at the end of the day. Meaning only the smallest programs are “new” or not yet in service.
WEX Inc, a global fintech company founded in 1983. We provide tech solutions in corporate payments, fleet management, travel industry, and healthcare. We have hundreds of current openings, both fully-remote as well as on-site. I've been with the company about 3 years. Competitive pay, excellent benefits, and a great work culture. Happy to answer any questions about my experiences.
I think just to preserve brands goodwill, Upwork should absorb the cost (which they have to this point), pursue legal action against the client, and not punish the freelancer.
I don't know the legality of withholding payments for future work due to the freelancer. I don't believe they have a right under the terms to do that, but I would not do any future work for free. That could be a breach of contract on Upwork's part, although haven't read through these terms enough to know that.
https://gallery.ecr.aws/