Personally, I dislike the idea of needing to "re spend" coin for something a character may already have. To even extrapolate on that, I feel a lot of this section comes from a DnD mindset that adventurers are out roughing it/camping the majority of their life, when in my experience that is rarely true. Characters tend to own homes, property, businesses etc where realistically most of the lifestyle things are things which characters should be affected by normally.
Let's say, a character owns a Stone 3 room home that is well furnished - they need to pay extra to be well rested. Or a character who runs a tavern or bed and breakfast which is of moderate+ quality... needs to pay extra to be well rested or well fed?
While I recognize that such may not be the normal in every chapter, but in the four I have played in it just seems like a coin tax on top of whatever was necessary to acquire that milestone that additionally seems to create false inflation by spending coin. Allowing wealthy characters to gain even more bonuses and advantages over characters that aren't.
Alternatives I could foresee; use Mundane Equipment to grant Lifestyle bonuses.
First, why I am not a fan of mundane equipment, so this suggestion I hope makes more sense. As currently written, Mundane Equipment (I Feel) is largely RP focused and firmly does something already done by Professions. Spending CP to make Horseshoes (the cited example) may be of value for a specific plot point... but equally both making and using Horseshoes are a profession in which one could make Silver or CM. But Spending CP to make them, awards you benign item that then doesn't "do" anything. An entire bag of Horseshoes don't hold a static value or importance mechanically - you spent precious and limited CP to make a RP item that an appropriate profession, already does in background RP.
Instead, Lifestyle bonuses could be attributed to Mundane Items. Setting them aside as "Casual thing random person 48 does" Versus "This thing that a trained crafter can do". The character spends their limited CP to make tagged items that when consumed/used provide a bonus. These bonuses are now associated to character development/growth/xp and prevents wealthy characters from just getting buff because #reasons, and higher level characters (whom are also typically wealthy) now has a choice. Spend a CP on mundane equipment to get the well fed buff, or spend that CP of a Crafting ability.
Now the drawback of such an idea is that we already have a crazy amount of things one can do with CP already, but all of those items "do" something for their xp investment. Mundane Equipment I suspect will always fall short because it forces a Smith to choose "Armor master" or "mundane stuff". The Smith, is also Profession: Smith - so they already "make tools and horseshoes, and sell them for 1s per day"
Don't get me wrong, I think there is going to be a fair bit of usage for mundane equipment from the plot perspective. But I very much dislike associating mechanical advantages to simply paying coin at logistics. Chapters can use more inventive and story driven methods to return coin to the chapter's bank and likely do it in a method that has a lot less OOG potential issues.