Alright, so it's a sort of a "modular" system.
First and foremost, and probably unrelated, characters need an inventory section in battles, to determine what items they actually, y'know, have equipped for that battle.
Anyways, moving on:
Certain items would have one or more "slots" to place a series of upgrades. These upgrades could be something like "When this item is used, the user deals an additional 50% damage with melee attacks" like what swords do right now.
Items in the shop, like the sword, would be removed. Instead, they would be replaced with some form of "Modular Weapon" that can have a number of abilities. Currently-owned swords would still function identically, they would just be the modular weapon with the +50% melee damage upgrade.
Most importantly, certain mods could be "swapped out" for battles - rather than buying, say, a magical scepter and a sword, you would buy one modular weapon and a "Melee Damage Upgrade" and a "Magic Damage Upgrade" - you could only use one, but you could choose which one at will.
Naturally, the rarer the modular weapon, the more upgrade slots it has. A starting modular weapon would have two slots.
Melee Damage +25%
Magic Damage +25%
Melee Speed +25%
Magic Speed +25%
Damage Resistance (10% Reduction)
Effect Negation (Once every five turns)
Rush Count +5
As for the kendo-style rapier, it would change to an android-only modular weapon, perhaps with twice as many slots, but an android could only use one. Users with two kendo-style rapiers would get a refund.
The Capsule Corp. Repair Shop would be changed to some form of "Mod Shop" where you could purchase these modifications.
Unrelated: Capsule Corp. Repair Shop NEEDS a price reduction.