Upgrading it should allow to have 4 slots! Otherwise I see no point upgrading it. Early game caps are too precious, late game it makes no difference when theres a guard with flamer....
There reallly is no point in putting people in the Vault Door room.
Just create a stat boosting room in the room next door, and put your best fighters/weapons there.
I have a double wide restaurant next to mine so the raiders are greeted by 4 heavily armed cooks.
Plus but the Brahmin Meat Loaf will tear you up pretty good.
They run the kitchen like Steven Seagal in Under Siege