Will it work with existing v1 accounts , or must create new ones?

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Bisq 2 is a different app at this time, with a new trading protocol based on reputation. You can import data from Bisq 1 accounts to get reputation, though.

What is Bisq 1 now will be improved and integrated in Bisq 2 in the future.

kyc lite. no thanks. vexl is pure p2p. I don't like having my name appear in random people's bank accounts

Correct. But you can use more private options there too. Cash by mail is the king.

that requires a lot of trust in a third party.. 😂