Upgrading from Diamond to Obsidian does NOT expand the chest for more space.

The chest should at least double its size when upgrading to Obsidian version of the chest, as its the last stage of the upgrade.
🤷‍♀️🤷‍♀️🤷‍♀️

Obsidian and Crystal are alternate versions of Diamond with different properties. Obsidian provides full blast immunity.