Personally I think this would cause way too many problems with camping.
First off games already drag on too long because one team is too powerful, and just turtle their own base the whole game. Adding traps would make it even harder to take them down.
Since the upgrades would cost diamonds, this would further add to the idea of camping your island or mid the whole game. Stay on island, collect diamonds, upgrade, and boom you're OP.
Although sharpness and protection would be nice, what we happen in OP? Would it even exist or would the levels go up to insane things that are too much? -Like at a certain level of prot all you need is a bunch of sets of leather and people would just fill their inventory with leather and gapples and never die.
And just to makes things worse, this would make eggwars too much like lazy wars/sleep wars/ bed wars. Eggwars is it's own game, and to shift over into a form of bedwars would make eggwars become too much like that ripoff of a game we call "bedwars"
In all, this could be good in some ways, but in too many ways this is a bad idea to be added
Personally I think maybe, just maybe, sharpness and prot upgrades could be hardcore specific to revive hardcore mode, and make it actually kinda fun, but at the rate in which you buy stuff it would cause too much camping