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Edit: And I clicked the wrong thing, and deleted instead of edited the first reply I did.
If you're rushing T3 stuff then yeah, it's not worth upgrading. Though on a casual playthrough it's not that damaging to also upgrade T2 stuff every now and then, especially since it also repairs the stuff. Obviously not everything needs to be upgraded to the max (and i would definitely not recommend to upgrade it Past the 5th upgrade), but something like the axe or the knife can definitely be useful early on, if you've still tons of insects to fight through.
And the Bow doesn't have a T3 variation, so upgrading the T2 bow is definitely a viable option, if you don't want to use the crossbow.