How does the Troll Blacksmith's "reforging" work?

The Troll Blacksmith offers to "reforge 2 items and turn them into one of better quality". Before I permanently do stuff to my items I want to better understand how it works, and specifically:

1. I am required to "Select 2 items of the same type". What qualifies as the same type? e.g. can I use two weapons or do I have to select the exact weapon type? What about rings? Armors?

2. What, exactly, does it do? Does it produce a single item with +1 more than the strongest item? What happens if I give one (or more) cursed item to reforge?

3. Does the reforging has a chance to destroy enchantments, like the Scroll of Upgrade works?

Well I went ahead and experimented a bit, here's what I found so far:

1. They need to be of the exact same item kind - e.g. two chainmails, or two maces, two rings of detection, etc.
2. It gives the stronger item +1. It even works with completely un-enchanted items, but I don't know what happens with cursed items.
3. Reforging can remove enchantments and inscriptions - in that sense it behaves like a scroll of upgrade.

Additionally, both items must be identified prior to the reforging.

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2. With cursed items, if you use "Remove Curse" on them. They will still add +1 to the best item even if they have negative points.

IE I have Plate+3 and Plate-2(Cursed). If I use "Remove Curse"(will remove all curses in your inventory). I can have the Blacksmith make Plate+4 with both items.