A user can delete a Upgrade if no payments have been made to the Pledge yet. However, if there have been payments made to another Pledge in the Upgrade, the user will receive an application error upon saving their changes.
We are currently evaluating this issue and will update this article when we have more information.
You are not able to delete an Upgrade if a Payment has been made to the Pledge. The database should warn you before you get to step 4 above. We will add a message that won't allow you to get to step 4 in the first place.
Steps to Duplicate
Click a Pledge that has been upgraded
Click one of the Pledge Upgrades that does not have a Payment yet
Click Delete Upgrade
It will show you a page that looks like the Upgrade was deleted