Abandonement of status. We will surrender our i94 upon exiting US.
When we return, a new i94 will be genearated. Now this new i94 will not match the initial i94 used to file h1b petition.
So since you abandoned the status , therefore change of status will be rejected.
Please note i am not talking about the petition in whole but only the CoS. Petition may still get approved but there wont be any i94 with your approved i797.
Lets go back to the basics. COS = Change of Status. In other words, at the time of filing, the candidate is in at least ONE legal status. Thus the filing is a legal COS.
Lets say the candidate left the country(while COS is in progress), at what time COS could invalid is… that if the candidate is not in the country (with a status), COS doesnt make sense. But before COS approval, if the candidate becomes with the status in US, COS must be approved IF NOT, the candidate would be in DUAL status(one is the status with which he/she entered during the COS process AND the second status is the status of the COS petition. This is nonsense…
Thus, regardless of the candidates hopping back and forth from the country, AT THE time of COS approval, if the candidate is in ONE LEGAL status in the country, the original COS must be approved. BTW, USCIS is dumb, they wont check the current status while approving the COS. Dos is a retarded adopted child of DOS. (thats why different units of DOS works like aliens within DOS)
It is kind of grey area. USCIS wants all I-94s to be returned when you leave the country including the ones that come with the approval notices. In your case, contradicting that statement, you will have to hold on to the I-94 that came with your H1B approval notice otherwise you will not have an I-94 associated with H1B when you return back. And there is no 100% clear way to check and verify that you were indeed in H1B status after Oct 1st because you left and re-entered back on H4 and got a new I-94 at the POE. As per theory, your status should automatically change to H1B as of Oct 1st. In case if it did not because you left and returned back on H4, you will need to apply COS again. To avoid these status confusions, it is advisable that you re-enter back in appropriate visa after Oct 1st or come to US early before H1 approval. But if you are okay with taking a chance, then go ahead with your plan.
But regarding the first part of the statement, Is it possible to hold on to your I94 while leaving USA? Is it legal?
I am travelling from 23rd April to 12th July. Possibly this would be the time-period between the selection in lottery and processing. I assume that approval would be granted somewhere in August-September. And by that time I will be back in USA.
You can hold it without returning( I did it so in the past by accident, there is no negative impact happened to my case, at least).
Having said that, returning and not returning of I-94 has no meaning since your exit stamp on the passport proves that you are out of any status once you have left the US soil.
When you are entering back, as @RaNa has referred above, you would get a new I-94, which over-rides any (including your hidden) I-94 as of that day.
Thus, your act of leaving country matters above the returning of I-94.