It appears this bug has been addressed multiple times before on the forums and remains unresolved.
Claw Weapons Bug (Cannot use weapon kits or repair kits) (Dec '22)
Bug Report: Iron Punching Daggers can not be reinforced by Simple Weapon Damage Kit (Aug '22)
Issue Type: Gameplay
Game Mode: Online Private
Server Type: PvE
Map: Exiled Lands
Server Name: The Hinterlands
Weapon kits cannot be applied to punching weapons.
Attempt to apply a kit to a punching weapon.