After running # freebsd-update upgrade -r 10.2 from 10.1 with a custom kernel, I get this message WARNING: This system is running a "smash" kernel, which is not a kernel configuration distributed as part of FreeBSD 10.1-RELEASE. This kernel will not be updated: you MUST update the kernel manually before running "/usr/sbin/freebsd-update install". This message is wrong. Because src/src is one of the components installed by the "freebsd-update install", you need to build and install the kernel manually AFTER running "freebsd-update install". However this is still not ideal, because by then you've installed the complete userland. Instead, freebsd-update should install src/src in the same first phase of install as it normally would install the kernel.