You forgot to mention the worst and most important part of it.
The smithing itself is not only an exploit but you are forced to choose between, completely ignoring a "major" mechanic, or exploiting the game.
A good example i can think of that happened recently is the backspace exploit in Total War games. That exploit made all AI stop their movements when its their turn when you pressed backspace. It made the game winable even by a monkey, but it was an absolutely easy avoidable exploit. All i had to do was not pressing it and i wouldn't have lost any experience the game has to offer.
But if i ignore smithing in Bannerlord i completely decline myself of the strongest weapons in the game. So by not fixing it, they just aswell could remove it. And there is no way around that.
But that being said, in my eyes they could just remove it, because the smithing function in itself makes hardly any sense whatsoever, its as halfbaked as it can be, since if i wanna roleplay a smith for the sandbox experience and roleplay aspect, why am i forced to be a weapon smith? No bows, shields, crossbows or armor at all. And 99% of the choices you can make is choosing between mediocre weapon part, or just take the longest one, craft it 10 times and just pick the one out of it that has the best stats.
Idk how much time and ressources they spent on the smithing part of the game, but that work should have been used elsewhere, and i think the best option would have been what this topic is about, if i wanna create something by myself i think every single M&B out there would have taken customizing troops over smithing your weapons anyday.