Yeah, I'm really glad the wooden backpack finally solved the hard mode balance issue, making hard mode tough but not impossibly tough.
As for the UX around backpacks, boots, and the flask, the boot slot actually unlocks with the Tanning Rack itself, not the leather backpack specifically. The flask ends up in the backpack slot mainly because it's a usable item, and currently, that's how the consumables category is handled. That said, I might revisit item categories in the future to better separate reusable items like the flask from standard consumables, but for now, it'll likely stay where it is.
Thanks for the bug report! I'll take a look into that blueprint issue when converting from hard mode back to standard mode.