This OnePlus 3.1 or 3S would feature an improved chipset (Snapdragon 821) and an LCD screen.
So why the downgrade to an LCD screen when the current OnePlus 3 model features an AMOLED screen? Apparently, OnePlus is facing a supply shortage of AMOLED screens. Additionally, using an LCD screen on a rumored OnePlus 3.1 would lower the price, perhaps attracting more customers.
As for the Snapdragon 821 – the chipset is relatively new to the consumer phone market. Included in the ultra-new Google Pixel flagship phone, the 821 is slightly better than the Snapdragon 820 variant currently serving the OnePlus 3.
A Chinese certification from last two months ago also points to a new OnePlus phone.
Of course, this is definitely still just a rumor – considering the same sources are also reporting that OnePlus would completely stop production of the original OP3, this rumor needs more support before it can be taken seriously.