I’ve finished the new forge menu!
A big addition is that captured foes must now be used to upgrade some equips!
(A fan suggested this a few days ago and I of course had to do it)
So not only are foes killed for food and items, they’re also melted down (presumably while still alive) to be used as crafting materials.
Capturing tough monsters more than once would be a chore, so I’m sticking to easy/medium foes for this. Some NPCs will also ask for them in side-quests.