I don't really like the idea of teams arbitrarily being able to surprise your opponent. It makes the initial vault building not very important, and it also makes intelligence gathering nearly pointless.
I would be ok with a very small limit, like 6, being used for every round, but if you make it more than that then the war becomes more like a sequential set of matchups as opposed to one continuous war.
Why do you thing intelligence would be nearly pointless?
Because someone might have 6 more devonian dragons instead of let's say 6 stone dragons they salvaged? Because 6 lightnings could be changed into 6 rewinds? Because someone might change a duo deck into a mono deck, and cannot revert it back?
The point is, as long as you use decks that counter mono decks of that element efficiently, there is nothing you have to fear about. And intelligence only changes slightly, because instead of:
They have at least 6 lightnings, because they used them and never lost them. They can have at most 12, since they never could salvage any.
They have at least 6 rewinds, because they used them and never lost them. They can have at most 24, since they never could salvage any.
You get:
They have less than 12 lightnings, probably 6, because they used 6 of them and they never could salvage any. There's high chance they're not going to convert them, since they don't need rewinds in their next duels.
They have at least 6 rewinds, because they used them and never lost them. They can have at most 24+(6*round number), since they could convert some of their cards into these. Quite unprobable, because they don't seem to need rewinds in their upcoming duels, but we might have to prepare against rewinds anyway.
Oh right, we are fighting against Time, so anyway we need to be prepared to face rewinds, no matter if they have 6, 24, or >9000.
Generally, if without in-element conversions, intelligence would give you info that certain team has between N and M of a certain card, with in-element conversions, intelligence gives info that certain team has between 0 and M of out-of-element-cards (often very improbable that it's below N, since in-element conversions are irreversible, and easy to counter afterwards), and info it's between N and M+6*round number for in-element cards. This makes a big difference only if N==0, but that happens almost only if the whole vault is visible (another possibility is that 24 of this card were lost), so it's not a big concern. And, whole vaults being visible makes surprises impossible. Some might view it as not-fun.