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RKE1 stable and long-term support?

Yes

Should we upgrade to RKE2 for some kind of reasons? Is there any good solution for on-premise infra?

Only if you have a compelling reason to do so

Is using RKE1 can be consider as a tech debt

No.

We've been using RKE1 for last 3 years and its a solid distribution. Only reason we are doing implementation of RKE2 on new clusters is because of underlying requirement of docker for RKE1.