My question is does a Duke that becomes Ruler lose their ducal position upon becoming Ruler under the new system?
No. The removal of titles is only to keep the chain of command. You can't be duke and have an estate without being region lord as that means someone is both above you yet below you and makes no sense. Same thing with being a ruler in that you can't be a lord and ruler without being duke because your duke would be your vassal and boss, which again does not make sense.
