It works the same for any of the other "ultimate" weapons. Why would you think that dropping the item would somehow result in getting one back? I feel for you, but it doesn't really make sense to me.
Not getting upgrades after only a handful of synths also doesn't necessarily mean it's bugged. It's entirely possible/probable that it works differently than prior stages, similar to how the last stage was different / more difficult than prior. The devs have even been saying that this stage was going to be an actual challenge that was going to take a lot of time to complete (unlike the prior stages for the most part.)
The "restart" behavior has been the same since the first stage, btw. I don't see it being at all possible that you will get it back as a freebie since the npc is "working as intended."

You probably just want to get your restore process started.