Loot:
NPCs can now be found equipped with tempered/enchanted items. Untempered items will be most common followed by "Fine", "Superior", "Exquisite", "Flawless", "Epic" and "Legendary". Enchanted items are rare and randomly selected from the list of vanilla enchantments. Charges on enchanted weapons are also randomly selected. The chance that an NPC is equipped with tempered/enchanted items increases with their level.
NPCs will now automatically obtain the loot of their dead targets if they died within melee range.
Degradation:
Tempered weapons and armor will now eventually degrade back to their original, untempered states upon use/hit. Continuously blocking with a weapon will significantly increase the rate at which the weapon degrades. If a hit is blocked with a shield, your armor will be protected from degradation for that hit and instead, your shield may degrade. This feature can also be enabled for followers.
Services:
Blacksmiths and fletchers will temper your gear for a price. All will start off as Apprentices and are only able to temper each item once (Fine). Their skill levels will progress through Journeyman (Superior), Adept (Exquisite), Expert (Flawless), Artisan (Epic) and then Master (Legendary) as they temper items. More expensive tempering will result in faster progression.
You can enable an option to have blacksmiths/fletchers take X hours to temper items instead of immediate repairs. After the X hours, a courier will deliver your improved items to you.