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The Adjustable Upgrade is an item added by the BetterChests mod. It's sole use is to allow players to upgrade vanilla Chests to an Adjustable Chest. This can be done by right-clicking a Chest with the upgrade. When using the item on a double chest, the clicked part of the chest will be upgraded and will separate from the other part, leaving a regular Chest and an Adjustable Chest.
Adjustable Upgrade has no known uses in crafting.