The whole download and creating of BE will work and then bootadm will fail, and won't be able to boot into new BE.
Solution: update to SRU10.5 first
pkg update --accept entire@0.5.11,5.11-0.175.
Then update pkg:
pkg update pkg:/package/pkg
Then only do the patch proper to update to Solaris 11.1
pkg update --be-name s11.1ga --accept
Crossing my fingers hoping it works.