Gotcha. I guess I didn't catch that. I just saw the empty grid and freaked out and reloaded. Thanks!

Not sure if this is a bug or intended, but if you have grid equipment in your Power Armor MK2 when upgrading to Mech Armor the equipment is destroyed. It would be nice for a warning or for Power Armor MK2 to not be usable as an ingredient if it has grid equipment still equipped.