Why can't I use the same funds to trade in both Securities and commodity segments?

You can hold 2 types of accounts on Upstox: Securities and Commodities and add funds in these respective accounts. Securities account lets you trade in Equities, F&O, and Currencies on the NSE and BSE, And a Commodities account lets you trade in Commodity Futures and Options on the MCX. 

Presently, if you want to use funds from the Securities account in Commodities (or vice-versa), you will need to first withdraw the funds to your bank account and then add your funds back to the account of your choice.