Picture 1: Initiate could not enter in Yuri Battle Lab
Picture2: Cyborg could
Picture3: Cyborg entered and got replaced for those nanodrones (elite purple thing)

So how did I make it convert inside of battle Lab? And how to select which one can and which one cannot?
Simple. I WILL TEACH YA

First, I need to warn you something. You can do it only at infantry with Trainable=no. And another infantry will have only one veterancy. Engineer cannot do it too.

Lets just say you want to convert CYBORGA into CYBORGB
First, go to building type

[BUILDING]
Armory=yes
Ammo=999
Passengers.Allowed=CYBORGA

Now, go to infantry type

[CYBORGA]
Trainable=no
Promote.VeteranType=CYBORGB ;;;;Not necessary, just for any case
Promote.EliteType=CYBORGB

[CYBORGB]
Insignia.Elite= Put blank one if you wish, since this cyborg will be ELITE! So, remove any VeteranAbilities= and EliteAbilities= to lose any elite advantage or balance it way you wish, I just provided you way how to convert one infantry into another

If you have Armory, you need to put Passengers.Disallowed=CYBORGA
Also, I did not test what happens with Academies, but since those are not trainable, nothing should happen. Or manually disallow those units from academy benefits.