From the twitch feed, upgrading makes your light level go up. Only had a quick look.
But does that mean we will start seeing people wear different armour and not just the same stuff now? Sure the endgame armour will have better perks but now we can have fashion/rep a faction?
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Legendary and exotic anything yes.
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Yes yes yes and all the factions have new armor did nit stayed the same as the dark below dlc