The bow upgrade is a nonexistent item in Thief: The Dark Project, possibly created and certainly supported by the fans, to tease new players or players who are not overly familiar with the games, as an initiation of a sort into the unofficial fraternity of Taffers. The origin of the bow upgrade, or who started the myth (the gamers or developers) is unknown.
According to myth, it is in the Alarus Extension. Ways to gain entry into the extension are as numerous as its stories that have been spun over the years[1][2][3][4][5].
The bow upgrade appears in T2X as an easter egg in the level, "Of Ill Repute".