CBSubs doesn't revert to a previous subscription like that. When you move from one subscription to another the previous is put into an upgraded state showing the subscription has moved on to a new one. One way to have what you're wanting is to use a parent plan. Example as follows.

Plan 1
- Plan 2
- Plan 3

Another option is to use CB Auto Actions to act on subscriptions state change and subscribe them to a different plan automatically. You'd use the below with a CB Paid Subscriptions action.

Plan Active
Global
Triggers: onCPayUserStateChange
User: Automatic
Access: Everybody
Conditions
1: [var3] Equal To PLAN_ID_HERE
2: [var2] Equal To A

Plan Expired
Global
Triggers: onCPayUserStateChange
User: Automatic
Access: Everybody
Conditions
1: [var3] Equal To PLAN_ID_HERE
2: [var2] Not Equal To A

Replace PLAN_ID_HERE with the ID of the plan you want this to act on.

This happens when CB Auto Actions changes their subscription? Is your free plan a free lifetime plan? If so be sure you've configured free lifetime plans to create subscriptions within CBSubs > Settings > Global. If already configured you can try using a Usergroup action in CB Auto Actions to also handle the usergroup swapping by creating a auto action for each plan then using the Plan Active usage shown above to replace their usergroups.