But will that be a hard fork or a soft fork?
Since we have to change the consensus rules for that and it's required that all the nodes accept the new rule, it would be a hard fork.
I thought anything that does not lead to creation of another coin is just a soft fork, I mean pertaining to this? Or will bitcoin blockchain be abandoned for a new one because of this?
Any upgrade that is not backward-compatible is a hard fork.
As I already said, for increasing the decimal places, we have to change the consensus rules. Nodes are free to not accept the new rules and have a separate chain. So, it's a hard fork.