It would replace the old one. But I might add a setting to control the new behavior. But only if it really seems like the old behavior is useful.
Basically the old behavior would do this:
1. Reset the rotation to 0,0,0 the first time the state is entered. (bad)
2. Look around while the state is active. (good)
3. Remember the last rotation when the state is exited. (ok?)
4. Restore the last rotation when the state is re-entered. (bad?)
The new behavior should be this:
1. Get the current rotation when the state is entered. (good)
2. Look around while the state is active. (good)
This really seems like the proper behavior.
Unfortunately some FSMs might now rely on 3 and 4 in the original behavior. But you could reproduce those with Get Rotation and Set Rotation.
I guess the right thing to do is add a setting so it doesn't break any existing uses. Something like "Remember Rotation." But it would have to default to true to preserve the old behavior. Which sucks a little bit, since it's not the default behavior you'd expect...
Or make it a new variant action "Mouse Look 3" There already seems to be a 2!
Hmmm, not really happy with either option...

Maybe just fix it and note the new behavior in Upgrade Notes!