There are two types of blacksmith's hammer. One is equipable, has +4 damage and has durability, the other also has +4 damage but no durability and is unequibable. Does this latter one have any function (such as a quest item), or is it a glitch that I can pick up and sell this otherwise ostensibly useless item?
It's been awhile, but IIRC, the one with durability is used as a weapon, and the other needs to be in your inventory when repairing a weapon yourself at an anvil. (Generally speaking though, you are much better off having a good weapon repaired at a Blacksmiths, and paying the fee; as doing it yourself will gradually keep degrading the weapon's overall durability over time, unless your skill is at 100%)
I can still repair items without the latter hammer (the unequibable one), and whether or not it is in my inventory has no effect on the resulting durability, (i,e, no increase in durability for having said hammer in my inventory, as one might expect.) A user on the Steam forums suggests it is likely to be a glitch. I'll look into it some more, a comment from an Arx Liberatis dev would be most appreciated.