Custom Crafting 1.13

Solution 1:

No, it is not possible to keep the item in the crafting grid and to damage it with a crafting recipe, though this might change in the future.

Buckets are actually an exception to the general crafting rules. If you use a filled bucket in a recipe, then it acts as if you just use the liquid. Giving back the bucket is no more than removing the bucket with the liquid from the grid and replacing it with an empty bucket. They are in fact two totally different items.

There are alternatives to actual crafting recipes, such that you can damage items, but they require some commands.
You can use floor crafting for example where you throw your items on the floor and they turn into your resulting item. In minecraft 1.13, you can retrieve the damage from your flint and steel and store it in a scoreboard. Then you can subtract 1 from the score and put the score back into the flint and steel.