I was using the large wooden storage crates from this mode - but it seemed like the mending bench from VFE ancients couldn't see the low condition items that should be mended in the crate.

Simple workaround:
Build a shelf - set it to the same settings for the items you would like to repair, set it to higher priority than your main storage.

This way mending bench sees the items in the "to repair" shelf and then when repaired the item is put back in the main storage, bobs your uncle.

Not expecting a patch to this mod given how straightforward the workaround is, just wanted to post up a solution in case other people are having the same issue. Also, I feel like this is more of a feature than a bug - the large wooden crates really are for longterm/bulk storage, so from an RP perspective it makes sense to me having a separate self for stuff that needs work.