This is such a great idea, but right now it doesn't quite nail it.
Monsters don't fight back. There isn't any strategy, you just stuff as much stuff and win, eventually the items scale and I replace with better stuff. But then the game moves so dang fast I can barely look at anything. All the tiles on the backpack look the same, so it took me a minute to figure where things stay and where they get discarded.
I think this idea has so much potential if you give it more time though. I kinda imagine it as something split up into two screens, one is like a 2d, side scrolling adventure game, and the other is the backpack like you had. The adventurer is the quiet type that never speaks, and the bag actually does all the talking and makes all the decisions, kinda like the hat from Zelda's Minish Cap. That's more of a subjective thing though.
On a more objective note, i think there needs to be breaks between fights, even if it's just a market. Can't be fighting all the time. Also more variety with monsters and weapons, some items are more effective against some than others. Than way, you don't fall into the trap where there's always just a clear better item based on stats, and you just maximize attack scaling and ignore everything else. I don't think that would be too interesting.
Great idea, just needs better execution! I really hope to see an updated version of this some day!
Hope to see you in more game jams! :D