Let me start by saying this issue arose almost entirely out of my own fault, as the issue pertains to a lack of understanding, not a lack of explanation. My goal with this post is two-fold:
1- Inform new users of the mod who are experiencing this issue, or something similar, to understand what's going on;
2- Give the mod author an additional perspective into how some people might interpret the information they see.

When I first dove into using Barrels and Storage, I was immediately interested in installing a 4k upgrade, as it was the highest upgrade available in survival and didn't know at the time that the standard crate couldn't support a 4k upgrade. I thought nothing of it when the crate accepted the 4k upgrade installation. Later, when I uninstalled the upgrade and only got back three 256k upgrades and three 64k upgrades, it confused me. So I started doing my research.

I discovered someone who had a similar issue on the SkyFactory4 GitHub, and the issue was closed after determining it was because the barrel/crate they were using was not capable of handling a 4k upgrade. It was mentioned that they should look at the crate to see its upgrade capacity before applying the upgrade, so I returned to my game to see if that was the same issue I was experiencing.

What I saw was this:

To my untrained eye, and since I'm now looking for an upgrade capacity indicator, that tooltip reads as "can hold a 4k upgrade." Of course, my interpretation is incorrect. What it means is, "can hold 4k items." Make no mistake, I understand this is my fault, as there is additional information provided on the front face of the crate when you are holding an upgrade in your hand. I didn't see it because my hand was empty at the time.

The missing piece of information that new users might be unaccustomed to is that upgrades are additive, not multiplicative. What this means is, the default 64 storage capacity of the un-upgraded crate is still there after you apply upgrades to it, i.e. a crate with a 256 upgrade can hold 64 + 256 = 320 stacks of items. It does not make the capacity of the crate 256, which is what I expected. This is why if you place a 1k upgrade on a crate and then remove it, you won't get the 1k back. You'll get 1k - 64, because the crate can't go over 1k capacity when upgrades are installed and can't lose the default 64 capacity when upgrades are uninstalled.

That leaves the question, should anything be done about it?
In my opinion, there should be, but there doesn't have to be.
I have multiple ideas, if I may offer them. For example, the wooden crates/barrels could be disallowed from receiving upgrades beyond their capacity. You could also set the maximum capacity for wooden crates to 1088 (64+1024) instead of just 1024, though I don't know if you could make this work for metal crates (overflowing any 16bit data structures you might be using). Alternatively, the first upgrade in a series could "subtract 64" as the upgrade is applied to simulate a conversion away from the default capacity; then, if the capacity of the crate is calculated to be zero because upgrades are being uninstalled, it would add back the 64 that was subtracted to restore the default.
The absolute minimalist idea I have would be to change the names of the upgrades from "x64", "x256", "x4096" etc. to "+64", "+256", "+4096" and keep all functionality the same.

Sorry for making this so long. I always feel bad when I make suggestions or criticisms, because I only ever want to be constructive about it and I don't want to be lumped in with the trolls who soil the reputation of people who are just trying to be helpful.