Upon is a weird word because both "up" and "on" tend to be unstressed. Compare "on earth" with "uphold". Even though the word "upon", by itself, scans with the stress placed on the "on", the presence of a stronger syllable after the "on" ("earth") means that the "on" will also be unstressed.
There is a such thing as a "promoted stress" where a syllable that is normally slack (unstressed) has a slight stress because it is surrounded by syllables with even less stress. For example: Shall I compare thee to a summer's day? scans with a slight stress on "to" because it helps for the passage into the normative meter and because relative to "thee" and "a" "to" has more stress. But that doesn't apply here because "up" has significantly less stress than the surrounding syllables so it would be a mistake to scan it as having stress.
So it's established that "it" and "up" don't have stress. That leaves "on" and "earth". This is very tricky. On one hand, as I've mentioned earlier, "on" has a slight tendency to be less stress relative to a word like "earth". But on the other hand, unusual meter can change that. The trochaic tetrameter "mighty online fighters fighting" is a really nice illustration of this: the trochaic meter of that sentence puts the stress on the "on" even though normally "line" would have stress instead of "on".
The choice is between "And every spirit upon earth" and "And every spirit upon earth". In terms of the mechanics of meter; I think both scansions are valid, as in if you read the poem out loud either way it works.
In terms of the greater context of the poem, I think there are a few differences between the two readings that the reader should keep in mind when making a decision. The main thing to keep in mind is that having three unstressed syllables in a row draws a lit of attention to that particular line. In contrast, spirit upon earth" draws a lot less attention: two unstressed syllables instead of three means you don't get that attention grabbing three short syllables, and the last syllable being unstressed makes the line less forceful, counteracting the attention grabbing effect of the two unstressed syllables.
Personally, I like having the extra emphasis on this line. The word spirit implies a certain sense of excitement, and I want the scansion to reflect the contrast between the spirit of the second to last line with the "fervorless" last line. This is a theme that does come up elsewhere in the poem so I think its reasonable to assume that the contrast is important: Hardy also contrasts the joyful "full-hearted evensong" with the "frail, gaunt and small" body of the thrush creating the song (and Hardy also has some interesting meter around that portion of the poem as well).
However, I can understand not emphasizing that line if you want to emphasize the bleakness of Hardy's description of winter in that stanza. It depends on what you're trying to accomplish.