This is basically too easy, its way too fast and simple to upgrade an item. It's better to load a massive amount of an item to upgrade like the other mods do. Otherwise u are just trading it in for better quality every time and you go from common to legendary in a minute tops
Alrighty, ask and you shall receive. Every craft has a 90% (configurable) chance of keeping an item. This might seem high, but it drastically reduces the chance of getting legendaries.
For a machine with 4 legendary Quality 3 modules (34.8% in total, max possible if no other mod), given 1000 common items, it outputs about 350 legendaries after 6300 crafts (that's over 100 minutes for common Augmentor)
80% chance of preserving items -> 140 legendaries, 4200 crafts
The result is reduced by a lot if there are higher quality tiers because there's a chance to lose the item after every augment (even unsuccessful ones)