Yes, you can not upgrade 7.1.6 to this beta. Due to a big number of changes upgrade pack requires about a week to prepare, so we decided to run betas without upgrade from 7.1.6 to save some time. We do hope to release the stable version in 3-4 weeks though.
Correct. If your site is already active and has data and you don't want to make a fresh install it's best to wait until full 7.2 is available. This is really a time-saving measure, since we're trying to just run a quick beta-testing stage in order to release a stable working version ASAP.