It is an easier process since it just requires filtering out the earlier loan with the same loan number and lower amount.
The FAQs state:
"The institution should report only the amount of the increase if the original or remaining amount of the loan has already been reported one time that year. For example, a financial institution makes a term loan for $25,000; principal payments have resulted in a present outstanding balance of $15,000. In the next year, the customer requests an additional $5,000, which is approved, and a new note is written for $20,000. In this example, the institution should report both the $5,000 increase and the renewal or refinancing of the $15,000 as originations for that year. These two originations may be reported together as a single origination of $20,000."
Two comments, if you don't report the earlier loan, you can report the entire loan for the increased amount "because it has not been reported earlier". The example crosses reporting years, but otherwise says you can combine.
I know quite a few banks that do this and none have been criticized. I have discussed the process with examiners and they were fine with it.