There is a degree of sequence to how the conversion is applied.
Basically, the game tallies up all the conversion of X to Y together, then applies them. It then tallies up A to B, then applies it. Etc.
So in your case…you have Elemental to Aether, and Fire to Aether. To the game, these are different “types” and so they are applied sequentially. The order of events this occurs in would take some digging, but not sure it’s that important.
This occurs twice, first for conversion from skills, and then for conversion from gear (essentially the game tallies up conversion on skills and item independently, so Aether to Elemental on a Skill would be considered a different “type” from Aether to Elemental on an Item).
Under no circumstances can damage be converted twice though (ex. can’t do fire to aether, then aether to chaos)