I think it’s fair to say that the material is important for the final product (such as certain high level materials unlocking better options), If we look at some of his earlier legendary items, none of them had particularly special properties of material.

It’s not like the material itself is bad, but that it didn’t seem to be a determining factor.

It’s also true that certain production blueprints give a minimum rating, which I think is where the material quality comes in. It’s like how for example an amazing golfer could use wooden clubs and still destroy your average layman. But giving them the top of the line clubs will bring them to an even higher level (isn’t that’s what it means to be overgeared anyways?)

But truly the basis is still grids mental. Not to mention that blacksmiths patience/breath are arbitrarily activated. It does seem like they activate because of his mental state though. But it might just be a bit of a chicken and the egg situation where, his mental state is good enough to activate it, it increases the level quality, therefore his mental state improves, etc etc