I applied UPS conversion mods to 4 items. They all worked, but on second glance two of the items lost the upgrade. Those were the only two items I upgraded from a separate (non-player) inventory.
The two that were not directly in my character’s inventory were reverted to regular battery items (a makeshift welder and an MP3 player), but I was still down those two mods.
I tested 3 methods of applying UPS conversion mods to MP3 players. With 5 tries each (small sampling, I know), the results were 100% accurate:
Applying the UPS mod to an item while neither item was in your inventory always failed to properly apply mod, and deleted mod.
Applying the UPS mod to an item while the mod was in my inventory and the item was either on ground or in container, always failed to properly apply mod, and deleted mod.
Applying the UPS mod to an item while the item was in my inventory and the mod was either on ground or in container, always successfully applied the mod.