This is really poor form and sucks you had to experience this first hand. SST is all about seamless and positive travel experiences and this certainly didn't happen in your case.
It is a known problem by SST so they can't try and pretend you're the first person to go through it....and if they do try and claim it's never happened before - then they have much bigger problems with managing internal intelligence, troubleshooting platform bugs and their digital strategy surrounding improving the customer process.
I had the reverse situation in my final months of P1 where I requested an upgrade for my mother, knowing her upgrade (I wasn't flying) would take on my P1 status at the time they were processed, despite her being a bronze member. She got the upgrade and likely disappointed a platinum on the same flight.
The suggestion of rehashing all upgrades once you hit P1 is a good temporary fix but ultimately upgrades should be processed by the status/value of the customer using real time data at the moment the upgrades are processed and not when you request it.