Does any one have any experience on this? What is the best way to avoid the queue with the above scenario? Thx!

From experience with a valid passport with less than 6 month's validity remaining... the e-channel would't accept me. An officer came over and pointed out the problem, told me to go fill out a paper form and join the queue.

Don't know how it works with renewing... but it's possible the system might not accept it if the old passport has been cancelled as part of the renewal process.

However - if you are required to join the regular queues on arrival (with a paper landing form), once you have re-enrolled in e-channel you can then leave via the e-channel (ie, just because you were manually processed on arrival, your departure can now be under e-channel).

So the 'pain' is limited to one time.

Wow this is a good reminder... am going to HKG at the end of the month and want to enroll

Interesting question. I suppose this depends on a) does the issuing country actually cancel a passport that's being renewed before its expiration date, b) if so, does the issuing country report this to the Interpol database, and c) does Hong Kong Immigration check the Interpol database upon each entry?

If all of the above are true, then it wouldn't work. If even one of them is not true, then it probably would work, assuming it's more than 6 months before expiration of the old passport.

I looked at my old US passports: in the case where I renewed before the prior passport's expiration, there is a big red "Cancelled" stamp opposite the data page, with the date of my renewal application written on it. In the case where I renewed after expiration, the expired passport does not have any mark on it that indicates it was cancelled. In both cases, they have the two holes punched in the cover. So, that's a very small sample size of data, but if you considered it representative, it would imply that the US does cancel passports that are renewed prior to their expiration date.

It is well worth doing, not that HKG immigration/customs is anything particularly onerous most times anyway in terms of wait. But it is faster and much more convenient.