If you have received a 3 year scholarship, don't you pay for the first year out of pocket? I thought if it was upgraded, it was done once you were at the school, and presumably after you had paid already? But if the scholarship doesn't apply until the 2nd year and you were admitted to the Academy, it wouldn't be an issue, I would think.
Your right, a 3 year doesn't start until the second year. Sounds like the OP's battalion has indicated they may upgrade his scholarship to a 4 year.
I would hope the OP would let the Battalion know his desire is to re-apply to both the USMA and USNA, he will want the PMS recommendation, and do this before they upgrade the scholarship to 4 years. Battalions only have so many upgrades and I'm sure they would like to use them on cadets that are planning to stay all 4 years.
Don't get me wrong, if they offer and know your intentions to re-apply then by all means take it. There is no guarantee you will get an appointment and having that first year on scholarship is not a bad thing at all.
My point is, just make sure they know up front your going to re-apply, many cadets do this every year. What you don't want to do is accept a scholarship upgrade and then tell them later that you are re-applying, the PMS recommendation may not be very glowing at that point.
This is one of the reasons 3 year scholarships were given to some QNS applicants, it gives them the first year to re-apply, if selected then the scholarship was never needed or funded. This is why they did not give these applicants 4 year, if the are accepted the second time the Army would now be paying for 5 years tuition.
To answer your main question, No, you would not owe any money back for the first years scholarship, in fact even if you get an appointment after the start of the second year you would not owe anything back.