Yes, the average is reset after a tier change.
No, the old numbers do not count any more.
In the moment of promotion you have seen the last Master ave.
After the next game, a 67, the ave. will have changed to that number. From 9 hole rounds, the score is doubled, 36 x 2 = 72. 67 + 72 give your current ave. of 69.5.
It won't make any difference if you play tournament rounds or not, all ranked strokeplay rounds count the same.