Thank you for reaching out and using XD. If I understand you correctly, you're trying to make the instance of the component as the master component. If yes, please right click on the instance of the component and choose" Ungroup Component" and then after making necessary changes you can make it a component again.
Let me know if I misunderstood your query. I will try my best to help.
yes, that is correct. I'm aware that you can ungroup a component and re-make it a component afterwards; but the issue is that by doing so you would lose the states and prototype properties of the component, which I would very much like to retain. Apparently such a feature does not yet exist, I would greatly welcome it if Adobe could add it.