I have continually found upgrading equipment to be pain in ass. When you go to equip the newly crafted equipment with the tab button that appears, it won't necessarily go to the hero you have highlighted but rather it will kick out the next hero's equipment in your formation list that isn't upgraded and replace it with the newly upgraded one. However that is not always the case because I have had a newly upgraded cloak just disappear to never be found again, and stuck with a basic cloak that was still reduced down to +7. I once tried to equip without using the tab button that appears during beta and again the newly upgraded equipment just disappeared completely.