Hi Ingrid,
If there is a /16 “ALLOCATED UNSPECIFIED” block that contains "real" Provider Independent assignments, that /16 would indeed be split in order to carve out that assignment. The LIR would end up with multiple PA allocations instead of one /16. The PI resource holder would be able to decide who their sponsoring LIR should be. It is possible that they would remain with that same LIR, or they could move to another sponsoring LIR and take their PI assignment with them. If the resource holder is an LIR themselves, the PI assignment could be registered under their own LIR account.
So in the current situation such a PI resource holder has "Provider Independent" space, but only if they stay with the LIR that holds the ALLOCATED UNSPECIFIED. After the change the PI holder will have a normal PI assignment that they can register with any sponsoring LIR they want. So I guess that PI holders will be happy about this, it turns their "kind-of" PI into "real" PI. And the affected LIRs might be less happy because they lose some grip on their customers. And then there seem to be cases where the ALLOCATED PI/UNSPECIFIED is used more like PA space (managed, aggregated and routed by the LIR) in which case converting it to ALLOCATED PA might be more reasonable (for route objects, ROAs etc) but that might make the "PI" holder less happy. Although in such a case it seems to me that the address space isn't really independent to begin with, so in reality things will probably remain the same for them, just better formally documented. Cheers, Sander