Correlating dopant distribution to its optical response represents a complex challenge for nanomaterials science. Differentiating the "true" clustering nature from dopant pairs formed in statistical distribution complicates even more the elucidation of doping-functionality relationship. The present study associates lanthanide dopant distribution, including all significant events (enrichment, depletion and surface segregation), to its optical response in upconversion (UPC) at the ensemble and single-nanoparticle level. A small deviation from the Er nominal concentration of a few percent is able to induce clear differences in Er UPC emission color, intensity, excited-state dynamics and ultimately, UPC mechanisms, across tetragonal to monoclinic phase transformation in rationally designed Er doped ZrO2 nanoparticles. Rare evidence of a heterogeneous dopant distribution leading to the coexistence of two polymorphs in a single nanoparticle is revealed by Z- and phase contrast transmission electron microscopy (TEM). Despite their spatial proximity, Er in the two polymorphs are spectroscopically isolated, i.e. they do not communicate by energy transfer. Segregated Er, which is well imaged in TEM, is absent in UPC, while the minor phase content overlooked by X-ray diffraction and TEM is revealed by UPC. The outstanding sensitivity of combined TEM and UPC emission to subtle deviations from uniform doping in the diluted concentration regime renders such an approach relevant for various functional oxides supporting lanthanide dopants as emitters.