What happens to my existing paid subscription if we sign up for a new premium managed WordPress hosting subscription?

You will continue on your current subscription till the end of the billing period that you have paid for.

Then the new subscription purchased via this private event will start to take effect.

The new subscription will then stop at the end of the new subscription period; after which you can choose to renew for another year at the then-effective subscription price.

This effectively ensures you have a price lock-in or guarantee for the next few years.