The Creation Catalyst Console specifically says “Transform a regular item into a set item”, but it does not say that a set item is an improvement. When you place a qualifying item into the Console it provides a preview of the item you will receive.
You can see clearly what benefits the conversion will provide. There is also a confirmation box with a countdown timer, allowing you to fully review what you are exchanging and what you are getting.
I’m sorry, Legend, but our Support staff is not able to refund or otherwise exchange items that you received.
If you wish to see a change tot how the system works you will want to submit feedback so our Game Developers can review it. Customer Support has no input into game design.