It's a kinda basic thing, but
...
¿have you tried formatting the player in FAT16 after you upgraded FW, or used the player as-is?
Also if it's something with the flash chip, you could try using Action's Production Tools (i recommend 4.19) to completely erase the flash chip & uploading the fw again, sometimes thath helps with ill-behaved players.
Tip: if the update process ends almost immediately but say Sucessful anyway, it's most likely that the program DOESN'T upgraded or written anything on the player. That could explain your
"after an upgrade of the same firmware, the player keeps the settings of the previous firmware" problem...