Card states: At the end of each round, if you are cloaked, roll 1 attack die. On a focus result, discard this card, then decloak or discard your cloak token.

I'm confused on what the options here are, the wording seems clear but I want to clear it up

When you roll a focus, you choose either:

A) Discard the card and decloak

or

B) Remove the cloak token from your ship

Right? Or do you discard it and either decloak using the 2^ or discard and just remove the cloak token from the ship?

The latter. The comma is supposed to delimit the "or", but it's still a little bit ambiguous.

If you roll the focus you discard the upgrade. With the upgrade going/gone you now have to lose the Cloak token but when you do you are given the choice of using it NOW or just ignoring it and having it disappear while doing nothing.

Essentially when you lose the Illicit Cloaking Device you much decloak except that in addition to the standard options you may also stay right where you are.

Ok, gotcha, just clearing that up, thanks guys!