I feel that the fact the upgrade does not bring over your enchantments kind of defeats its purpose?

That should already be a thing... that was among the first things I did after implementing the Upgrade Kits in the first place, making it transfer over enchantments from the old item to the new one when upgrading.

One moment - testing again. My last test did not show it working.

You are right my apologies - the enchantments just did not show in the crafting window.