This idiom is from the practice of magicians hiding tricks or gimmicks IN the sleeve, right?
Historically it was more about physical objects being stored there. Stage magicians, for example, may palm a coin or other small object and then transfer it into their sleeve to make it look like it’s disappeared (or store one there so they can palm it and make it look like it appeared out of nowhere). Similarly, someone cheating at cards might store an extra ace (or king, or some other high value card) up their sleeve so they can covertly transfer it to their hand. An assassin or thug might store a dagger or throwing knife in a wrist sheath, which would also be ‘up their sleeve’, to keep it out of sight but readily at hand. Other possibilities that come to mind include a handkerchief, a folding fan, or a coin purse.
In pretty much all of those cases, the object would be put into or taken out of the sleeve from the bottom of the sleeve (the part where the wrist and hand stick out). Because the object is being put in from the bottom, it is inherently being put ‘up’ the sleeve, and it’s not an object that would normally be ‘in’ the sleeve, hence the usage of ‘up’ here.