When working with CRM Package Deployer, it always does an "Upgrade" process while importing a new solution. Please check out this post to find out more about the different solution update processes:
https://dynamics-chronicles.com/article/alm-and-dynamics-365-solutions-explanation
CRM Package Deployer fails with the "DeleteHoldingSolution Timeout" message, if the deletion of the holding solution takes more than 2 minutes. Good news are, there is a way to fix this problem by forcing CRM Package Deployer to do the import in an asynchronous manner. It's documented on the PowerShellGallery page:
https://www.powershellgallery.com/packages/Microsoft.Xrm.Tooling.PackageDeployment.Powershell
In the Importconfig.xml file: Add requiredimportmode as an option to force an async or sync import behavior for a given solution.
<?xml version="1.0" encoding="UTF-8"?>
<configdatastorage xmlns:xsd="https://www.w3.org/2001/XMLSchema" xmlns:xsi="https://www.w3.org/2001/XMLSchema-instance" installsampledata="false" waitforsampledatatoinstall="false" agentdesktopzipfile="" agentdesktopexename="" crmmigdataimportfile="">
<solutions>
<configsolutionfile solutionpackagefilename="SampleSolutionOne_1_0_managed.zip" requiredimportmode="async" />
</solutions>
</configdatastorage>
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