You have to explain why in a much clearer way.

Explain that you do appreciate it. Explain that if you hadn’t had the prior thing you probably would have loved it. But now, it’s a change, and it’s a big change, in several ways, including the nostalgia factor, and you absolutely appreciate that this thing is newer and more expensive but it doesn’t YET make sense for you to make the change and because of that you don’t want to make the change.

And because of that, it will just be sitting unused and you don’t like the idea of it sitting unused.

It felt bad to you to not use a gift.

And that, wanting to keep what you have, not wanting a change, and not wanting it to sit unused, is why you suggested a return, and not because you don’t appreciate it.

I think you’ll have to explain the “not wanting change” bit the most, by explaining why you feel that way. Maybe try finding a similar comparison. Imagine you’d gift them expensive jewelry or clothes they feel they couldn’t ever wear, maybe something they couldn’t wear together with their favorite clothing. A bag that would only sit in a closet. A tool that does more, but is heavier or whatever. Whatever that feels relevant to them, that makes them understand why you feel like you don’t want to make the change, not yet.

How should you have initially responded? Hard to say without knowing the people around you, but I’d say it would’ve been safe to say something like “oh, I don’t know if I can replace the current thing yet, I like it too much, and it’s got so many years left”

In other words, tell her that the gift was indeed great and that there’s wrong with the gift except timing, and emphasize you do not fault her for anything, you’re happy she thought of it, you’re sorry your reaction made her feel bad, you should’ve communicated better, and you’ll make a change to communicate better.

Perhaps even say something like “I probably should’ve told you I wanted to use this current thing for much longer, I should’ve explained more about how I think about these things and how I plan”. Because your initial response sucked honestly, and you need to make sure your phrasing don’t make her feel she made a mistake.

If she really likes being able to give you gifts, and if she now feels uncertain about being able to give you future gifts (this is very likely, by the way!), you should consider implementing that “communicating better” thing - for example (you don’t need to do it exactly like this, IT’S AN EXAMPLE) by maintaining and sharing a list of your existing things plus a wishlist, with details like “don’t replace before” and “replace no later than” and “required specs: XYZ”. And if she likes feeling like she can put her own touch on it, DO NOT present it as “do exactly this”, but rather “you can take inspiration from this”.