How do I reset URL for Product Display when replacing the main product? (instead of having an increment added to the URL)
I am not sure why this happens in Commerce Kickstart, while it does not happen with regular Drupal. Almost as if the product's path are cached or something, but clearing all caches after deleting a product did not change the outcome. But I did find an easy solution. 

You can fix that by deleting your Aliases, go to /admin/config/search/path/delete_bulk



And then regenerating them