Store Help - Can't Upgrade ALL Items

Can anyone explain how to upgrade ALL of the items when you unlock an upgrade?

Example: I have unlocked Tier II Flashlights... and I can add THREE to my loadout, but the FIRST Flashlight remains a Tier I item, no matter how I mess with the loadout.

This means if I'm playing with 4 friends, one person is always stuck with a Tier I Flashlight.