upgrading mad memories and other back slot items
As far as I know, there’s a small bug with the mad memories (the blue one) and the low level back item you get from your personal story, where you can only upgrade them with tier 1 gems. That’s the best you can do there.
If you want a better back item, your options are to get the Mad Memories: Complete edition(Green) It’s equivilent to a level 80 green back item, and should be upgradeable with any gem you want.
If you want even better, you can complete your personal story quests. The second to last mission will reward you with a level 80 Back with stats of your choosing (well, you get to choose between 3.) It will also come with an exotic jewel already in it, saving you the cost of getting one yourself.
And then finally, the Best In Slot back items, are the guild backpacks for 5 gold.
You should be able to transmute the book to the reward you got from your personal story if you want to keep the looks.
The reason why only the bottom tier jewels work is because upgrade item levels refer to the level of the item it can go into, not your personal level. A level 40 upgrade item requires a level 40 item to socket into.
Those basic items, and the complete Mad Memories have no minimum level, so the game treats them at level 0 (or 1). Only the lowest tier jewels have that minimum level.
finish personal story
get the backbrace of your choice (level 80 green one. It’s something like 4 stats worse than the guild backpacks)
get a fine transmutation stone
use it
select book
select backbrace
skin of book
stats of backbrace
jewel of backbrace
You now have a level 80 mad memories, with the stats and jewel of your choice (can go get another jewel if you want to reslot it)