We can upgrade our Nano Fiber Nakura set via the trade in for the Reputation system but the Tholian Crystal Sword was also available for Lobi and now is in the Rep store as part of a set and that version of the sword is superior.
So could we likewise "register" our sword and get the MK XII set version of it? I do not even really care if you get any extra marks for it just the upgrade.
You seem to be misguided about something. The Nukara Set Mk XII was originally acquired through the lobi store by purchasing an upgrade item. There is no upgrading involved by registering the Nukara set. Registering the item will just give a bunch of Nukara Marks with the Mk X version destroying the item and the Mk XII version giving the item back. If Cryptic added a project to register the sword, then it would just give some Marks and you might be able to keep the sword. You won't be able to replace it with the better version.