after almost 100k of items it hasn't even given back a single green, are we sure it works?

I know Factorio has been patching quite a lot in the last few months, but I think it's working. I can at least get anything to increase from the basic grey (common) quality up to blue (rare). I haven't had anything go pink (epic) or orange (legendary) yet, but that could be just me.

Still works as of the current version of the game. Remember this is basically the same idea as a recycling loop except self contained so if you want fast upgrading you need a lot of them.