New upgrade/reinforce toggle not working properly

[BJGeary]

I have all of my naval units set to reinforce-only, yet they are being upgraded to newer models which is the opposite of my understanding of how the new toggle is supposed to work. I've provided saves from two consecutive turns to show this. I was suspicious when I wasn't building up spare production points as I intended, and it's because it's all being sucked up by my fleet despite the settings.