I read this thread and found nothing useful... (except apparently I skipped over bbman's post which explains exactly what I have written)
If you buy S2, you get all the S2 content for the rest of LFS's history. So you can upgrade to what becomes LFS 1.0 in the future and your licence will be valid. The thing that sets the licences apart is what content you are able to use. S1 can use their set of tracks and cars, S2 can use the S1 set plus the S2 tracks and cars and S3 (presumably) would have the S1 and S2 sets, along with the S3 content.
In short, the stages for LFS you are buying the content (cars/tracks), not features (everything that isn't content).