It's similar to the "Chromatic" rarity in Brawl Stars, isn't it? In that sense, sure, it could work. However, in Mech arena, upgrades are limited by blueprints. Blueprints are exclusive to each item, and having the rarity of an item change midway while gathering blueprints for it will cause a lot of trouble and discontent. For example, if I spent 10k a-coins buying blueprints for Overdrivers and then Plarium makes them Rare.....I'm gonna be throwing hands.  

Yeah I'mma be real I just didn't think of that loll

I mean I guess you could convert bp, kinda like they did with panther/ks..?

I don't know if this is what you mean, but I made it unclear in my post, the stats would stay the same.

The rarity would be appended based on generally how effective they've been

Also, you said that an epic isn't as good as a legendary, but that really wasn't the case for ember guns.

The stats staying fine isn't an issue, but the economics are. Legendary items cost disproportionately more to gather sufficient blueprints for - and thus upgrade - even if the cost for upgrading a legendary item is the same as upgrading an epic item on paper. What drop rate would the "New" item rarity have? If it has a drop rate that's higher than legendary items, then it becomes more expensive to upgrade the item when comes down to legendary; punishing players who weren't willing to fork out money during the crate rush or other paid events. If it has a drop rate that's lower than legendary, then it punishes heavy spenders for getting the new item in the crate rush. Besides, when a new item is launched this way and there is no indicator regarding what rarity it will ultimately end up in, it'll cause even more uncertainty for buyers; who would justify spending 150 USD on a new piece of gear just to test it out, only to later find out that it's going to be relegated to Rare tier? It won't help them get any sort of progression in the Gearhub at all. 

The rarity system and the grade update that happened had an end goal in mind: to make it easy for people to estimate an item's performance based on the grade. Some exceptions to the general rule happen from time to time, like Embers being too good for Epic rarity or Dreadshots being a Legendary grade disappointment. However, the thumb rule that Legendary mechs and weapons are *usually* better than their Epic or Rare counterparts stays. Having the "New" rarity implemented and then having it change rarity and blueprint drop rate based on how the mech/weapon performs will simply bring in a lot of uncertainty, not to mention how drastically it'll fluctuate based on current meta (e.g Revokers were considered worse than Ember guns pre-mod update and look at the situation now. Similar goes for Railguns and EM rifles vs Quantum guns.)

I meant, it's supposed to be that way.

If something is tagged as legendary, it's supposed to perform better than something tagged as epic.

This the main issue I have with the current system, that sometimes legendary items don't deserve their tag

Yeah that's true. Legendary should be better, which is why they might wanna change ember guns to legendary and knock repeater to epic. Ofc they do NEED to make more epic equipment (take note plarium), but they should release more equipment that's rare too. The last one I remember is pepper shakers (frag gun).