I'm curious as I was recently given the option, although my char won't use it.
What happens if she appoints i.e the Margrave of Keplerville (part of Keplerville duchy) to duke of Alphaville duchy? Will Keplerville automatically become part of the new duchy? Or will the margrave lose his margrave-title? Or won't it work in the end?
It shouldn't even give you the option.