This is a new game with the latest version of 1.6 with Mercenaries.
When one of my ships is finished upgrading, its class includes the word "Upgrading" as shown in this screenshot.
It stays that way for as long as I have checked. The worst part of this is that a ship that has "Upgrading" in its class can no long attack anything belonging to a Race I am at war with. Nothing happens - it doesn't attack, and there is no notification of any kind about why it can't. If I try to attack anything of a Race I am not at war with, I get a notice that we are not at war, and do I want to do this. When I choose yes, I can't attack. The ships seem to be correctly upgraded and will fight with all weapons and hit points if attacked, but they cannot attack.
Enemy ships also have this problem as shown in this screenshot.
When they are this way, they have never attacked me and seem to be confused about what to do. They eventually run away.
When I was getting ready to submit a ticket on this, I loaded a save game with the problem ships to verify they still had problems. They didn't! They were completely normal.
I did some experimenting and found that it doesn't occur if the ship is upgraded at a starbase, a shipyard or a planet. It only occurs when the ship is upgraded in space. The problem can be eliminated by saving the game and reloading the save, which is a nuisance.
I submitted Ticket #AQQ-756-44721 with the saved game and information on how I think the problem can be duplicated.