I happened upon this one the other day. Turns out there's at least one other user with the same issue.
When trying to smith weapons for the first time, I am faced with a message in the crafting window that says "Status: Upgrade Required"
I have done everything the game states I need in order to begin weapon smithing, but it simply won't work. The other user who had this issue claimed to fix it by building another weapon smith. Suddenly, both of them worked properly. In my case, this did not work. If there are any suggestions as to what I might try or if it will be included in a future update as a fix, please do tell! I've played for hours on a play through just to be able to smith weapons and now I can't