The upgrade prepare sets UpgradeLevelNovaCompute=auto which causes nova compute to throw error nova.exception.DBNotAllowed: nova-compute attempted direct database access which is not allowed by policy This is caused by other issue - https://bugs.launchpad.net/tripleo/+bug/1871482 but can be worked around by unsetting UpgradeLevelNovaCompute.
Since the problem described in this bug report should be resolved in a recent advisory, it has been closed with a resolution of ERRATA. For information on the advisory (Red Hat OpenStack Platform 16.1 director bug fix advisory), and where to find the updated files, follow the link below. If the solution does not work for you, open a new bug report. https://access.redhat.com/errata/RHBA-2020:3542