The locomotive internally tracks the precise temperature of the steam that is used for fluid mixing. So while you still see the lower-tier icon (and the performance of the lower-tier steam) the internal temperature will actually increase and as soon as the temperature raises above the threshold for the higher-tier steam the icon (and performance) will appear.
A known „issue“ is that the temperature thresholds are extremely strict. By filling a locomotive that had cold steam in it initially with high temperature steam you will never achieve the temperature of the high temperature steam and therefore you will always be stuck on the lower temperature. I can reduce the thresholds a bit such that you don‘t have to have a perfect mix that is basically only achievable by draining and re-filling the locomotive entirely.
At the moment the locomotive only has distinct performance levels and no continuous performance curve. That is a limitation of the current implementation. I may also add a few intermediate performance levels to smooth out the curve a bit.
TL;DR: known issue, temperature thresholds are way too strict. Will fix and probably add more performance levels.