The item upgraded is removed from the loadout because the item which you put in the loadout no longer exists, it was used to create something else. If the item in question is the armor or helmet the loadout is removed because not having either of those spots filled is not possible; if the armor or helmet was covered by a costume the costume would take its place.

When equipment is upgraded, according to the loadout mechanic, the item which used to be in the loadout no longer exists; it does not recognize it was upgraded because the crafting process considers the original item to be a material used to create another item. Yes, I repeated that from the previous point. Why is this important? The original item no longer exists and the loadout mechanic is unable to recognize where it went. How is it supposed to know? It was just a material like the other materials used in the crafting process. Why should it remember? Equipment is classified as a type of item which happens to be equippable; take for example you have two Blast Bombs. One of them you upgrade to become a Super Blast, the other Deconstructor. How is it going to remember which became which? They are the same thing. UVs? What if they have the same UV(s)? The game sees them as both being Blast Bombs, why should the mechanic remember which one is which? You would have to give them different names as the 2* Blast before upgrading it; but wait, there is no way to do this. If we could name items to be different than the item name this suggestion would be possible, but due to how it works it is not.

i would say that it would be less time consuming, but I also have to agree with Juances
Instead of erasing, you can always resave it as the same name