Ok that is confusing (needing to build it again) but at the same time upgrading at the same place
It does make senese in that there is an addiiotnal production cost for the actual upgrade itself but is not a nupgrade but a construction of a "new" improvement so yeah...
If production cost would be assigned to upgrading the PD, that would prevent refitting it so again I can see they were forced into this constealltion with the given mechanics
A clean approach would be 3 different buildings with their own slots but hten you need to also refit 3 individual buildings each time trippling the micro MGMT for this function
Or: Just name the PD contruction of higher tiers "upgrade" and clearly mark it as variant of the PD Improvmenet icon. ITs not a refit like refitting a ship but an upgrade of existing Infrastructure. I know tht improvements are auto-upgraded in similar cases but this is clearly the exception and maybe it wouldnt confuse people that much