Is that a LAX-IAH flight using EWR as a connecting point? I didn't think such a routing was valid. It sounds like you have two different "trips" there. Which one is waitlisted?

Either way, you definitely want to keep the upgrade applied since you remain at the top of the priority for R inventory - above EUAs - once you are checked in and the waitlist is transferred over. If you cancel the upgrade with miles you're back in the EUA pool which is much less likely to clear.