If I have 2 copies of an equipment item, one equipped, one in the treasury, and I click "Sell all but 1", both the equipped item and the one in the treasury disappear/get sold. Might be the same when clicking "Sell (1)".
Also, and this might be intended, rather than a bug, although still annoying: I'll leave 1 equipment item in my inventory, to be equipped later, and send the rest to my treasury. When I sell from the treasury, it prioritizes selling from my inventory.
Both of these 2 behaviors make smithing new equipment very micromanagement-heavy, as I have to send it all to my treasury first, then sell all but 1 for each, before being able to equip/put them in my inventory.
EDIT: playing on v2.24.1