As a level 11 female wizard I had a hard time removing my torn cloth pants (req level 1) to replace with another torn cloth pair (req lv 11). While in town before heading out to zone 3, I double clicked on the new pair. The picture of me showed me with them, but if I hovered over other pants in my inventory the pop-up window stated I was still equipped with the lv 1 pants. Neither lv 1 nor 11 was shown as being carried in my inventory on the right.
Things I tried - went to blacksmith where both pants had the "E" indicating they were equipped. I enchanted the better ones, then went back to inventory menu and I thought things had resolved as I thought was able to sell the lv 1 pants.
However when dragging the lv 11 pants off my avatar, the lv 1 were still underneath! I dragged them off as well and sold them possibly for the second time.

Seems fine now ...