With the new update, once a blade or hammer head is created, it can only be that item type. You can hammer it to change its appearance, but you cannot turn a blade into a hammer head anymore.
The new method for crafting is:
- Place the correct number of ingots on the anvil for the item you want to make
- Press the "Z" key on your keyboard, this will pop up a radial menu.
- Click on the type of item you want to create (blunt or blade)
- Press "Z" again to dismiss the radial menu
- Hammer the ingots.
Follow these steps and you'll always make the correct weapon.