Both old format policy files and new format policy files are used right now:
[user@dom0 ~]$ cat /etc/qubes/policy.d/35-compat.policy
#
# NOTE:
#
# The following line enables compatibility mode. It reads files in old directory
# (/etc/qubes-rpc/policy). It also generates deny rules that were previously
# implicit after each file, but they are added only after policies for specific
# arguments, that is, for files with '+' in the name. For generic files, without
# '+', no such rules are generated and the control "falls through", which is
# a departure from previous semantics. It is done that way not to shadow the
# default rules.
#
# The "!compat-4.0" directive is transitional only and will be unavailable in
# next major release (R5.0). This file will be removed in that release also.
#
!compat-4.0
Since compatibility policy file has higher priority (35), the policies from old policy format files will have precedence over the policies from new policy format files with priority lower than 35 (>35).
You can try to remove the rpmsave files and redo the qubes-dist-upgrade stage 6, maybe the rpmsave files are causing the script to fail.
Policies in old policy files (in /etc/qubes-rpc/policy) will have precedence over all policies in new policy files (in /etc/qubes/policy.d/) that have filenames that start with number higher than 35.
The qubes.InputMouse and qubes.InputMouse.rpmsave are two different policies, the Qubes OS don’t use the policy with the name qubes.InputMouse.rpmsave.
Once again:
If your system was upgraded correctly then the mouse policy should already be present in the new policy file /etc/qubes/policy.d/50-config-input.policy and there is no need to create the old policy file.
Just remove the rpmsave files and rerun sudo qubes-dist-upgrade -p to see if it’ll be finished successfully.
It means that this compatibility mode support will stay in Qubes OS until version 5.0 so users will have time to switch their policies from old format to the new format.