The upgrade script will always set Compensation_Scaling to No_Scale_Compensation in the resulting v5.0 instance (XCO or XCI) regardless of the previous setting.
To work around this issue, hand-edit the resulting XCO (ISE) or XCI (Vivado) to re-instate the former value of the Compensation_Scaling parameter. All other parameters, additions and deletions are okay.
This issue is fixed in 2012.3.