Can this tool upgrade things outside of the upgrade group restrictions?

Yes it is possible to upgrade any entity to any other entity.
I've tested it with some outlandish combinations (e.g. burner inserter -> rocket silo).
Due to the huge amount of entities there is no guarantee that anything will work afterwards though.

This only works with manual upgrade. Bots are restricted as the normal bot upgrade algorithm is used.

I'm mostly interested in upgrading blueprints, since the vanilla upgrade planner can't upgrade earth rails to space rails when using SE due to different collision masks.
or earth belts to space belts.

Yeah, that should work. Unfortunately blueprints are a bit unstable, so please safe before trying that and report any errors.