>If I have an old player that is perfectly technically capable of playing new media, will it fail to play requires new keys?
Yes. It will require a soft/firmware update, which won't be available if the device has widely known vulnerabilities which cannot be software patched that would allow for key extraction. HDPC is not limited to physical sources.
I'm not an expert on HDCP but I don't think this is exactly correct. The standard doesn't rotate through new generations of keys; instead, revoked hardware keys are burned into all Blu-Ray disks burned after the time of revocation, and compliant HDCP implementations are required to check their own hardware key against that list before allowing playback. I don't know whether a hardware manufacturer could remediate the vulnerability that caused their key to get revoked and distribute a new key via a firmware update, but that sounds reasonable.
> which won't be available if the device has widely known vulnerabilities
Probably won't be available full stop. Very few devices ever get manufacturer updates - they're all focussed on just making a new version of the device.
If it's still in warranty, sometimes they'll take it back for a refund.
Yes. It will require a soft/firmware update, which won't be available if the device has widely known vulnerabilities which cannot be software patched that would allow for key extraction. HDPC is not limited to physical sources.