The team wanted to get rid of the higher upgrades entirely, hence they did not give it to the advanced factions. However, the city revolt mechanism cannot be modded. I think that when a city revolts the A.I. gets a certain budget to buy units and upgrades with. It can only buy units that are recruitable in the city (unless the city is designated rebel capital, in which case it can recruit anything), but upgrades are not limited that way.
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