As I understand it, K brakes were banned in interchange on tank cars as of October 1, 1953 and had a final ban (returning cars)by January 1, 1954.
Is there evidence that there was a large scale rebuilding of tank cars to equip them with AB brakes at this time or were many of the cars scrapped then?
The appliction of AB equipment to most cars did not involve "rebuilding." Standard practice was to fit the AB cylinder onto the mounting where the KC cylinder/reservoir were originally installed and then add frame outriggers as needed to support the separate AB valve and reservoir. There are many photos of cars so modified. Notable exceptions were UTL's "Van Dyke" frameless tank cars, built early in the 20th century with heavy tank bottom sheets and no center sills. As the surviving "Van Dyke" cars were very old by 1953 and there was no simple way to attach AB equipment, they were retired without receiving AB brakes.
Was there any "grace" period?
No.
By 1954-55 should I expect to be running only AB equipped tank cars (since interchanged privately owned cars predominate)?