No this isn't prior art. As described they want to push a new kernel across the hardware. Ksplice is hot patching the running kernel and adjusting the filesystem to match, so Ksplice is prior art.
I remember patching a running SunOS kernel on a Sun 4 back in the 90s to allow a WAN application to continue running without interrupting the flow on the WAN. It was a bit hairy as I did it from the command line using adb, rather than by running a patching program. It was only a modest set of kernel changes and I could hardly have altered all the (450KB?) kernel by hand in a reasonable time, but a suitable program could have. I imagine that people did similar things with mainframes in the 1960s, to avoid downtime.
There will be limits to what you can alter in a running kernel, on current hardware architecture. This is a different way to approach the problem, but will also have practical limits.