After upgrading XenDesktop Controller to 7.11 there is no prompt to upgrade the functional level. The Functional level shows up as 7.9 when we create MCS catalog on 7.11

Several new and enhanced features have been introduced in the VDA for release 7.11. However, the minimum functional level of the VDA is release 7.9 and later. After upgrading from 7.9 to 7.11, you do not need to update the Machine Catalog's functional level. If you are upgrading from a VDA prior to 7.9, you need to update the functional level to 7.9.

About functional level: The functional level controls which product features are available to machines in the catalog. Setting a minimum functional level makes all features introduced since that version available to the catalog. Machines will fail to register if they are running an earlier VDA version, unless it meets the minimum functional level..

Refer to eDocs information on VDA versions and functional levels.