It's easier to keep things segregated. It is not anymore different than doing the upgrade in the same jail. Which at the end of the day you are doing the upgrade in the same jail, because at the end of the day pg_upgrade just needs the old data an binary to start and create some dump files.
But the real problem here is with the table spaces. Because in order to copy the relation over I would need to mount the old data to the /usr/local/pgsql/data on the new jail. The relation would be there and would finish successfully(I did this exercise). However the 9.3 install would be in a different directory, say /usr/local/pgsql_93 and will not have the data files because they now live in the old install location.