I see this in every game, regardless of whether I am playing a stock or a custom faction...
I research Weaponry, so I have access to both the dagger and the axe. I can then design units thatspecifically use either of these weapons. However, when I click the icon in the design window to make the weapon choice upgradeable, it says "No items of this type are currently available", and it therefore won't let me create a unit with upgradeable weapons in this category.
All other design choices - e.g. One-handed Blunt Attack, all armors, etc. - work fine and I can design units with upgradeable aspects in every other category.
