There have been some changes to Shire  and Scaevan  Gear upgrades with 5.3. And it’s a little confusing. You can check the patch notes for 5.3 here.
Notice that the NPC in Idyllshire no longer sells Un-Augmented gear and no longer sells upgrade materials. The upgrade NPC across the street will still upgrade gear if you have the upgrade materials left over from before the patch.
However, if you have the un-augmented gear, but no Twine, Gobcoat or whatever, then you have to take a hike to the Calamity Salvager in a major city. Here’s my visit to the one in Gridania.
When you visit the Salvager in any of the three starting cities, you need to “Deal in Spoils” and then choose the Shire / Scaevan War or Magic choices to upgrade your old gear to the new augmented type. It costs the same number of tomes as before, but the intermediate materials [ twine, coat or gob] are no longer needed. Once you upgrade all your gear, you never have to deal with the salvager again. All the new gear starts as Augmented, for more tomes of course.
I’ve not yet dealt with the issue of Ironworks gear . I’ll come back here to update this when I found out what’s up.
Update: I have found some answers about Ironworks gear
The nice ladies in MorDhona now sell only Augmented Gear for the same number of tomes as the base weapon plus the upgrade. Same story as Shire and Scaevan gear. However, the Calamity Salvager does not Deal in Spoils for Ironworks gear. And the Ironworks Upgrade guy in PeaceGarden / North Shroud can upgrade gear in the old way, but apparently does not have a new upgrade path, and of course you can no longer buy the twine/coat/etc that he wants to do the upgrade.
So, as far as I can tell, we are stuck having to buy the augmented gear again for the full price if we have un-augmented Ironworks gear.
Minor confusion, but important.
May you walk in the light of the Crystal