IOS – What happens to existing free users if an App gets moved from free to paid

The "official" way to fix, per Apple, it is to email Apple's iTunes support (iTunesStoreSupport@apple.com), inform them of the problem, and then wait for them to fix it for you on their end. The good news about this solution is that my email was answered very quickly, the support person knew what the issue was and how to fix it, and within a couple days of telling them about the problem they had fixed it and I am up and working again.

After they told me it was fixed, it did take almost exactly 24 hours to take effect, and in the email they told me "wait about 24 hours and try purchasing an app again."

At the time I was having this problem (while traveling abroad) I was in no mood to "wait it out" as other answers have suggested, but since it was handled so capably and promptly by iTunes Support, I wouldn't suggest that as a course of action. It is a known issue for them.

You can upload the app without worry.

If your app got rejected,it won't affect the future submissions and you'll keep the app name with yourself. Your app name won't be taken by any other person.

There is a feature in the itunes-connect to set the release date. Even if your app got approved, it won't be released to public.

if there are major tasks to be completed in the application, it is better to create a new application and make the app-status to waiting for uploading of binary. you'll have 6 months time for uploading binary(setup) after creating the app in the itunes-connect.