It's exactly like refactoring. You can replace a component that does something with a different structure for accomplishing that. Of course, if the system was tangled, then you may need to refactor other components first (read: relocate them to give room). The structure of the base around something is going to place limits on the refactoring. If the base is so horrible that you decide to gut it entirely, it's just like a rewrite.

The efficiency of "refactoring" in Factorio is like refactoring code using notepad while typing with your toes and you're only allowed to compile the source once you're done. Which is to say: on a completely different level!

Why not? You clear out the part you don't like, and build anew

No, code refactoring does not fit perfectly in this analogy. And your ability to do so is somewhat dependent on how you build. But I think all those factors are simply part of the puzzle in refactoring a factory