If a defending unit with a supression token is behind heavy cover and is attacked by a unit with sharpshooter 1, does the supression bump cover back up to 2? I know it doesnt add to heavy cover but in the case of the reduction.

We played as if it didnt change anything

It doesn't, because first you determine cover (none/light/heavy step 5 of attack) and THEN you reduce it by X from sharpshooter X (step 6 of attack: modify attack dice by card effects). There is no bumping up again. Compare RR p. 15.

As explained in the rulebook and the rules reference for determing cover:

first add up all positive factors and cap it to 2 - so heavy cover (2) plus suppression (1) still is capped at 2

then apply negative modifiers like sharpshooter or whatever will be invented in the future.

Cool, cheers. Thats the way we played it