It just occured to me to check the ringhero.ini; Galadriel.ini.
I added Upgrade_ArnorFaction here, and now it works.
ChildObject ElvenGaladriel_RingHero ElvenGaladriel ; Player no longer has the ring hero upgrade when the hero is created. Behavior = RemoveUpgradeUpgrade ModuleTag_RemoveRing TriggeredBy = Upgrade_ArnorFaction Upgrade_MenFaction Upgrade_ElfFaction Upgrade_DwarfFaction UpgradeToRemove = Upgrade_RingHero Upgrade_FortressRingHero RemoveFromAllPlayerObjects = Yes SuppressEvaEventForRemoval = Yes ; this is to avoid the Eva event about 'Gollum stole our ring' ; when we are actually losing the upgrade because we built the ring heroine End ; Spawn a dropped ring object. Behavior = CreateObjectDie ModuleTag_DropTheRing CreationList = OCL_TheOneRing End Behavior = ExperienceLevelCreate ModuleTag_LevelBonus LevelToGrant = 10 MPOnly = No End