My setup

The Chassis on the left has only an Extractor Module with no upgrades, and the Basic Log Pipe is set to be the default route.

When I reconnect them and allow it to work once, then disconnect them again, it sends 1 item.

After I move the items back to the first chest, install a Module Upgrade and a single Item Extraction Upgrade, then reconnect and allow it to work once, it takes 4 items.

After moving the items back and allow it to work once again, it takes 8 items:

After moving the items back again and allowing it to work once, it takes 16 items:

And then it takes 32 items, and then stops increasing and takes 32 items every time.

After removing the upgrade, it now takes 64 items at a time. (I've stopped breaking and replacing the pipe).

If I install 2 upgrades, it removes 4 stacks at a time. Adding any more upgrades does not increase this.

Yes, from what you describe it is exactly #1431

Am I missing something? It seems like the upgrades are kinda breaking the functionality which they are upgrading

#1431 was me removing upgrades, while this is upgrades not working correctly while installed

I'm making quests for Logistics Pipes, and this is the first stumbling block so far.

This is also probably related to #1431

Code-wise it'll probably be the same bug, so I'll duplicate this.

I'm making quests for Logistics Pipes, and this is the first stumbling block so far.

That looks very nice by the way :)