if you hypothetically started a fic several years ago and you write differently now and you're rewriting it, would you update the already existing ao3 work with the new text with a notice about it in the author's note, or would you create a new work and mark the old one as discontinued/rewritten?
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but if it's a big fic do it anyway, if it's been years the majority of people will need a reread anyway,
Lots of chapters and a decent amount of bookmarks, create a last chapter with a note and a link to the new work.
The best way I've seen it done is adding/amending the a/n with a "woah hey there a better version!" & a link to the rewrite.