Okay, so I came back to playing this for the first time in a couple years and I like the changes I've seen so far!
I just killed the Smith and used the catalyst to break down a unique, and it worked the first time... but any subsequent attempts it acts like an invalid recipe. I've tried giving the catalyst and items to a different character to use, I quit and relaunched, and I've tried both with and without PlugY running. I am not sure what else to do at this point, it's mildly frustrating to say the least!
EDIT: Well I'm a complete moron: I was attempting to use it on uniques I got from Griswold's crate without even realizing, which is why it wasn't working. My bad...! (I'd delete this post, but apparently am unable to do so.)