Upsells are a variation of the cross sell block. Instead of adding a product variant to the cart, upsells will replace a specific cart item with the selected upsell variant. See Difference between upsells and cross sells for more information.
Upsells require 1 or more variants to be specified. For example, if upselling a large size order then a medium size order must be selected as the target to upsell from. This can be accomplished through the component display rules:
More details about custom display rules can be found here How to set custom display rules