I asked support and this is their reply.
It seems for technical reasons they can only grant Arcstone back to all the people affected by downgraded equipment.
I don't understand much about the internal way of compensating for this but in my head the same way you can give Arcstone you could probably also give back other materials.
I might be wrong and it can be a lot more complex than that so i'll wait until the devs announce something new but as the owner of a plethora of sets and weapons maxed out this is pretty disappointing.
How do you guys think this should be handled?
I know it's a sensitive matter for some people but try to keep it civil.
EDIT: format and typos.
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