I think it means that if you are doing a installable upgrade i.e if you are using the CD to upgrade the ESXi on the host you should make sure you are not running embedded on it. Since you are just running embedded on an SD card and you want to upgrade it should be fine.
It would cause a problem if you were trying to install the ESXi when the ESXi was embedded on a device on motherboard like some OEM's do.