Is it allowed for players to trade/reorganise at any time during the town market phase or only at the end? It seems a bit silly if they can't but there may be a mechanics reason for doing so.
There is a note in Red text on page 39:
"IMPORTANT: During the Town Market phase, Heroes may discuss and
freely trade items between them, before trading with the Town Market."
I missed it at first too. Something about the red text. I seem to block it from sight.
As far as transmuting, I think that is covered by the Trading Equipment for other Equipment action of the Town phase. You can trade in equipment for other equipment of equal level value. What I'm not sure about is can you go beyond the examples they give? Or are those examples intended to be the available options?
It says you can trade 1 for 1, 2 for 1 or 1 for 2. Then is goes on to say "as long as the combined Level of the cards discarded is equal to or greater than the combined Level of the cards acquired.", which could suggest it's open for other combinations...like 4 level 1s for a level 4. Or do you think it's intended to be a strict outline of what you can do?
What is clear is whatever combination you choose you can only do it once so you need to make it count.