While I like the idea, honestly I don't know how to implement that. I have no idea how to catch it so that you can't use the upgrade button unless you're in town. I don't even think it's possible.
I think it would be simpler to just stick to the plan and use the trainer/constable to train the troops using a scripted event, which might take the player's Training skill into account. That much is pretty easy to do, with some figuring out.
For the curious, I've separated the noble Knights (who join your party via events at random or upgrade via training from squires) from the Knights that get promoted from commoner Swordsmen, Billmen, Rangers and Men-at-arms. This way, if you really wanted, you can have a full-time knight training school in a castle, and while they're not exactly the same as the noble knights that dedicate their entire lives from boyhood to becoming a knight, they can still be a powerful force if you're willing to spend the time and money to training them. Take note, this will really take a long time. Training bigger batches takes a bit longer than training just one or two guys, but it obviously yields more troops. I don't want to limit the player to exactly the same composition as AI lords, because it really was historically possible, especially for the king's personal army, to ride with mostly armored knights and men-at-arms.
I've done something similar to most of the other troops (though this part hasn't been completed yet). Let's just say the whole process of hiring and training will make so much sense that it'll feel very natural to produce and upgrade your troops as you see fit.
Aside from that, what still needs doing is the dialogue with the Constable, and the scripts that will handle the delayed timer training. I can look at the current Constable upgrade script (haven't seen it yet), which is pretty much the same thing as I want to do (except mine will take much longer of course, and not limited to tier 3, as there aren't any real tiers in my system). Also rare random encounters (like the random tournament invites) where small parties will ask to join your party. These are important aspects of the gameplay I had in mind, and I would like to have them completed before I put out a public test version.