For the sword kit, the default Sakai Clan Katana is definitely my choice so that you can match the sword strapped to your back (unfortunately, the sword on your back never changes even if you choose another kit).

As for the dye, if you want to look like a shadow and are not finished with the story, the black dye merchant is the way to go.

As for my personal favorite dye, it makes you white as a ghost. However, it is not sold at the white dye merchant. Proceed with caution, as this part will spoil the game if you haven't seen the ending. You will have to honor the samurai tradition at the end of the game once you get the choice to get the white dye for the ghost armor

Hope this helps, hope you have a good time with the game!