Hi Balaji,
If you directly upgrade your current BPC NW 7.5 to BPC NW 10.0, it make sense to backup appset in BPC 7.5, but why need step 2 to step4? Anyway you need to execute the appset migration after you upgraded to BPC NW 10.
BTW, please refer to note 1823883 when you upgrade.
Thanks,
Hengye