In the CMDB class hierarchy, Server is a generic parent class, while Linux Server and Windows Server are more specific child classes. When ServiceNow Discovery detects sufficient evidence (such as OS signatures) to move a CI from a generic class to a more specialized one, this action is called a Class Upgrade.

A Class Upgrade occurs when a CI is reclassified down the hierarchy into a more specific subclass, enriching the record with additional attributes, behaviors, and discovery patterns appropriate to that class. This is a standard and expected behavior in mature CMDB implementations and aligns with Data Foundations best practices.

A Class Switch would imply lateral movement between unrelated classes, which is not what happens here. A Class Downgrade would move a CI from a specific class back to a more generic one, typically when discovery confidence is reduced---not the case in this scenario.

By performing class upgrades automatically, Discovery improves CMDB accuracy, reporting precision, and service mapping quality without manual intervention.

Therefore, the correct answer is C -- Class Upgrade.