If a cell is updated from having elements on a fixed level to being on Default, the Replace Cell tool will place the updated cell on Default.
The use of level Default with ByLevel symbology is beneficial as it simplifies cell creation and maintenance.
If a cell is correct in appearance but drawn on the wrong level, it must be edited in its library, and it might be necessary to modify its Element Template. But if it is on Default, the only edit required is in the Element Template.
However, the Replace Cell tool ignores the Active Level or Active Element Template and its association toggle setting.
Adding additional tools settings, similar to the Change Element Attributes would address this idea's needs.