Change title of the manuscript in arXiv
Google Scholar might show the two versions as separate articles, but you have the option to merge them in your profile. While merging, you get an option &quot;Select the best version of the article.&quot;. So, selecting the newer version here should ensure that the correct arXiv version is linked to.
Citations also get merged when merging articles. It is however possible that the citation count will have an asterisk next to it indicating that Google Scholar is not sure if both versions are the same paper. Citations would not get lost here, you also have the option to unmerge the articles any time.
I am not sure how new citations will be counted, but as long as the versions are merged, this should not matter since both versions will point to a single entry in your profile. I am also not sure what happens to citation counts of the papers that you cite. Ideally, your citation of those papers should not be counted twice, but Google Scholar's citation data often has errors for various reasons so one should only use them as a rough indicator and not as an exact count.