After some discussion, we considered this issue to have two essential parts to it.

1. Renaming of a profile causes loss of credentials.
   This is a known limitation and we can track it in this issue:
   Zowe CLI profiles - Mechanism to rename a profile without loss of credentials #1405

2. The prefix addition of type_ to profile names after running the zowe config conver-profiles command.
   As part of the design, we introduced aliases that allowed users to not have to change their scripts even though the profile names might be different.
   In order to achieve this goal, we allowed for a V1 profile named LPAR1 to be referenced as LPAR1 OR type_LPAR1.
   This means that zowe files list ds HLQ.DATASET --zosmf-p LPAR1 should still work after running the zowe config convert command.

   Here is a quick demonstration

    C:\Users\USER\test>zowe --version
    7.11.1
   
    C:\Users\USER\test>zowe profiles list zosmf --show-contents
    -
      name:     LPAR1
      contents:
        host:               my.host.net
        port:               1234
        rejectUnauthorized: false
        protocol:           https
    -
      name:     LPAR2 (default)
      contents:
        port:               443
        rejectUnauthorized: true
        protocol:           https
   
    Warning: The command 'profiles list' is deprecated.
    Recommended replacement: The 'config list' command
   
    C:\Users\USER\test>zowe config list
   
    C:\Users\USER\test>zowe files list ds USER.public.c* --zosmf-p LPAR1
    Enter the user name for your service (will be hidden):
    Enter the password for your service (will be hidden):
    USER.PUBLIC.CBL
    USER.PUBLIC.CNTL
   
    C:\Users\USER\test>zowe config convert
    Detected 2 old profile(s) to convert from Zowe v1 to v2.
   
    Are you sure you want to continue? [y/N]: y
   
    Converted zosmf profiles: LPAR1, LPAR2
   
    Your new profiles have been saved to C:\Users\USER\.zowe\zowe.config.json.
    Run "zowe config edit --global-config" to open this file in your default editor.
   
    Your old profiles have been moved to C:\Users\USER\.zowe\profiles-old.
    Run "zowe config convert-profiles --delete" if you want to completely remove them.
   
    If you would like to revert back to v1 profiles, or convert your v1 profiles again, rename the 'profiles-old' 
    directory to 'profiles' and delete the new config file located at C:\Users\USER\.zowe\zowe.config.json.
   
    C:\Users\USER\test>zowe profiles list zosmf --show-contents
    An error occurred trying to list profiles.
    Profile IO Error: A Zowe V1 profile operation was attempted with a Zowe V2 configuration in use.
   
    Warning: The command 'profiles list' is deprecated.
    Recommended replacement: The 'config list' command
   
    C:\Users\USER\test>zowe config list
    profiles:
      zosmf_LPAR1:
        type:       zosmf
        properties:
          host:               my.host.net
          port:               1234
          rejectUnauthorized: false
          protocol:           https
        secure:
          (empty array)
      zosmf_LPAR2:
        type:       zosmf
        properties:
          port:               443
          rejectUnauthorized: true
          protocol:           https
        secure:
          (empty array)
    defaults:
      zosmf: zosmf_LPAR2
    autoStore: true
   
    C:\Users\USER\test>zowe files list ds USER.public.c* --zosmf-p LPAR1
    Enter the user name for your service (will be hidden):
    Enter the password for your service (will be hidden):
    Stored properties in C:\Users\USER\.zowe\zowe.config.json: user, password
    USER.PUBLIC.CBL
    USER.PUBLIC.CNTL
   
    C:\Users\USER\test>
   

Hopefully this serves as an explanation to how the new name shouldn't have impacted end users (too deeply) when converting from V1 profiles to V2 Team Config using the zowe config convert-profiles command.

Next steps:

• We will consider adding more details to the command output if this issue gets enough 👍🏽
• Marking this issue as a documentation enhacement
• I will create a new issue with the details below and reference this one.

There is a slight problem with the AutoStore functionality (which I will create an issue for).

After the demonstration, I noticed that the user and password were stored in a new LPAR1 profile, which caused the same command zowe files list ds HLQ.DATASET --zosmf-p LPAR1 to fail since it does not merge the contents with zosmf_LPAR1 (i.e. by design we don't merge profiles of the same type, only with base).

What should have happened is that, since we detected that we were using an aliased name, the AutoStore functionality should have saved the credentials in the new profile (zosmf_LPAR1) instead of creating a new one (LPAR1).

C:\Users\USER\test>zowe files list ds USER.public.c* --zosmf-p LPAR1
Enter the host name of your service: (Ctrl C)
Stored properties in C:\Users\USER\.zowe\zowe.config.json: host (THIS LINE SHOULD NOT APPEAR)
Command Error:
Expect Error: Required parameter 'hostname' must be defined

C:\Users\USER\test>zowe config list
profiles:
  zosmf_LPAR1:
    type:       zosmf
    properties:
      host:               my.host.net
      port:               1234
      rejectUnauthorized: false
      protocol:           https
    secure:
      (empty array)
  zosmf_LPAR2:
    type:       zosmf
    properties:
      port:               443
      rejectUnauthorized: true
      protocol:           https
    secure:
      (empty array)
  LPAR1:
    properties:
      user:     (secure value)
      password: (secure value)
    secure:
      - user
      - password
defaults:
  zosmf: zosmf_LPAR2
autoStore: true

C:\Users\USER\test>

Thank you for raising this enhancement request.
The community has 90 days to vote on it.
If the enhancement receives at least 5 upvotes, it is added to our development backlog.
If it receives fewer votes, the issue is closed.