Hello,
I recently started a fresh game on version 3.05.1186 PX1 PX2 -steam, and have this issue.
You can find my quicksave attached.
Load the attached saved game.
Select Sagani and go to the inventory.
Observe they're wielding Stormcaller;
Right-click the bow and observe that sleeping in a Sky Dragon nest is the step required for unlocking the next level of the soulbound weapon.
Back in game, observe you are in the nest of the Sky Dragon.
Rest.
Observe the weapon does not upgrade.
You can also try defeating the dragon, it still won't upgrade.
https://dood.ie/p/deff836b-0c4c-4447-b30d-2216a894e09b_quicksave.savegame