Playing Sky Factory 3 from the Curse client, no matter what I try I can't seem to get lootbags to craft up to the next tier.

If any of the bags have been opened, it will not upgrade. That is a config option in the general config if you want to change it.

I actually came here to say you should remove that as a feature coz it can be exploited massively and basically makes having a mob farm to get bags pointless coz you can just open bags n leave one item in and then craft it into a higher or lower tier & keep doing it over n over basically one uncommon bag and u have infinite items.. I really love this mod but that is totally OP n breaks the game really I think they purposely disabled it for skyblock myself at-least the crafting after opening anyway it really makes more sense not to be-able to craft after opening them..

There is a config option to disable it, so if you think it is overpowered, simply set B:"Prevent Merging Opened Bags" to true.