Eh, what?
Promoting a current region lord to duke is exactly what the button does. There's absolutely no need for anyone to hand over any estates or anything.
If you want to promote someone who is not currently a region lord, it gets a bit more complicated, because you need to make them a region lord first. If you want to form a duchy from region A but have the current lord of region B become the duke then you need to switch around regions first, yes. But if you understand the system - that a duchy is created by promoting a region lord - then all that is totally obvious.
Let me reiterate.
Here's the scenario:
You're realm has just conquered a new city. You want to make this city the basis of a duchy. The city has no lord present since you just conquered it. You can only appoint a lord to this city if they have no other obligations to other regions or estates. Thus if you want someone from another region not part of the intended new duchy to become the new duke, they must step down from all their previous regions, estates ect then you can promote them, then you can make them lord of the region, then you can make the region a new duchy.
The summarized step by step is
-conquer city
-ask desired lord to step down from previous titles so he can be promoted
-make lord marquis of that city
-form city as new duchy making the marquis duke automatically
That's a four step process, requiring cooperation between two players which must be completed in exact order. It is not "click and they become duke".
(which btw would create more problems if you wanted to name one person marquis of the city and a completely different person duke of the duchy)
Now if I'm the ruler and I want to take the new duchy for myself, and I was duke of the previous capital city the process is:
-conquer city
-step down from previous city
-install yourself as lord of new city
-have a lord step down from previous titles claims ect so you can promote him to marquis of previous city.
-rename original duchy to the name you want the new duchy to be
-create new duchy based in previous capital city under the name of the old duchy for the sake of continuity
-wait for ever last region lord to change allegiance back to the old duchy.
This is a 7 step process requiring cooperation between every lord in the current realm. It is not a remotely intuitive way to form new duchies. It is not "click and it becomes a new duchy"
There's really nothing further I can say to make this more clear then it already is.