@flebourse Ah, I figured out what I was doing wrong. I had been executing the sysupgrade command with the -c option, which I thought was necessary in order to preserve files.
But in fact, that's what was causing it to ignore the /etc/sysupgrade.conf. Once I remove that flag, everything worked as expected! The helptext for sysupgrade is sorely lacking in my opinion. Not Teltonika's fault at all- just an OpenWrt thing...