PC keyboard, I tried playing with both WASD and arrow keys. Whenever I reach a shopkeeper, as soon as I press any directional key (A, D, left or right) the characters start fucking but I don't get to choose the upgrade.
Sorry for the confusion. You just choose between the two presented options with left and right. The upgrade is applied and the sex scene starts immediately so this is working correctly for you.
I will try to make this interaction more clear in the next update.