For instance, in the settings page for Tab Session Manager, you can click an upload button to upload JSON session files from your device to the addon. I looked up if UBlock Origin Lite (the re-implementation of UBlock Origin with Manifest v3) supports custom filter lists and all the results said no it can't due to the limitations of Manifest V3. OTOH I found a StackOverflow post and Google Groups discussion saying its possible with the filesystem API.
Firefox, however, has no plans to deprecate MV2 and will continue to support MV2 extensions for the foreseeable future. And even if we re-evaluate this decision at some point down the road, we anticipate providing a notice of at least 12 months for developers to adjust accordingly and not feel rushed.
I guess that kinda depends on what you mean by "upload". If you simply mean if user can point the extension to load some local file eg. via <input type="file"> then sure, that works just fine.
It sounds like the issue you mention regarding uBO Lite is not about if it can read a local file, but rather that it can't use that data to update the active filter lists - perhaps because it already has too many dynamically inserted filter rules, but that's just a guess.