Pretty easy to replicate. First, get a modular storage and put a storage module tier 1 in it. Then fill it up with items. After that, use JEI to pull up the recipe for Storage Module Tier 2, the use the '+' to move it to the crafting section of the Modular Storage. After that, hover over the 'craft 1' button, and bam.
https://i.gyazo.com/5416de119fb74eebb869a3fa80217a3d.mp4

Either it's resetting to a previous state of no items, (which happened to me and made me lose everything) or else it resets to a time when it was full of items, letting you grab them out again, duping them. Not sure if there's something strange going on with trying to craft a Storage Module while using a storage module.

For the time being, because this is apparently pretty buggy, I won't be using modular storage at the risk of losing my items or getting tempted to dupe them.

What version of RFTools?

The reason I ask is that this bug has been fixed in RFTools 5.18 so I want to confirm that you are using an older version

And BTW, this bug can only occur when upgrading storage cards. There is no other way to trigger it

Well that was fast. I had just downloaded this to play with a friend. But apparently you're right, it's 5.17. I'll update and try again. Sorry for the false bug report. Looks like your chest system is back on the menu. Thanks!