This version can be balanced depending on your DM
The main message first: I think this version works well enough to playtest it.
The most potentially abusable parts of this version are covered by a "At the DM's discretion" clause, which makes this feature somewhat hard to objectively evaluate. A DM who allows you to transform weapons and armor, including magic weapons and armors, and to use Adamantine as a material, will result in a wildly different feature, than one who does not.
In a way this is fine -- we here can only try to objectively compare to other game features regarding abuse or power levels. What works at your table however, is always up to your DM, and so while it is tempting to use this site to go back and say "See, everyone agrees this should be fine", the DM has the last say. The DM will experience what kinds of unforeseen uses you come up with, and if they are OK with them or not, and may want to boost the power, or reduce it, depending on how this plays out.
Comparing this to the book version:
||You perform a special alchemical procedure on one object composed entirely of
||transmute a nonmagical object or nonmagical portion of an object into another material. At the DM's discretion, some magical items may allow certain transmutations of them, such as a magic weapon being able to be silvered with this ability.
||wood, stone (but not a gemstone), iron, copper, or silver, transforming it into a different one of those materials.
||each material must be one of the following: wood, stone (but not glass or a gemstone), iron, copper, or silver, or a similar material if your DM approves of it being included on this list
|Time to use
||For each 10 minutes you spend performing the procedure,
||You may spend an hour using a component pouch or arcane focus
||you can transform up to 1 cubic foot of material.
||The portion or object must be composed of a single material and fit within a 3-foot cube
||After 1 hour,
||The transformation lasts for seven days. The transformation for a continuous piece of transmuted matter also ends when any or all of the transmuted matter in that piece is scrubbed with ash or soap (this scrubbing can be done as a free object interaction.)
||or until you lose your concentration (as if you were concentrating on a spell), the material reverts to its original substance.
||You must handle the targeted matter
|Uses per day
||Limited only by time
||Once you use this feature, you cannot do so again until you finish a long rest.
The main difference that makes this stronger and therefore needs to be looked at as a risk for abuse is that you can affect parts of an object and a much larger volume -- for example at a cube with 3 feet per side, you could target part of a massive stone pillar or wood beam or iron vault door, to turn it into something that lacks the toughness and elasticity. You exclude glass, but as discussed in earlier verisons, some kinds of stone, like slate, are as structurally brittle and make it easy to destroy the structural integrity of these targets. So you can use this to overcome all those obstacles, or, if unobserved, bring down a building.
The long one hour casting time mitigates many of the possible abuses, as spending that long can mean you can be discovered and stopped while performing Minor Alchemy. If I were your DM, I'd think that is acceptable. You cannot use it to cover an escape, and just with brute force you can hack through some of these obstacles, except maybe the iron vault door. Just be prepared that your DM will nerf it after you destroy the second or third castle or dungeon wall with this.
The other aspects that make this stronger are the lack of concentration, 7 day duration. A single use per long rest means you can have up to 7 objects (or parts thereof) transformed on an ongoing basis instead of just one. That is enough to even in in the minimal version, affect all the main weapons and several armors of a typical adventuring group.
If you want to use this feature to silver weapons, it should be spelled out more explicitly, not only for magical weapons. I assume this is the intent, based on earlier discussion, and based on the clause that this can extend also to magical weapons at DM discretion; in fact it seems the limitation to non-magical objects, that is absent in the book version, is mostly due to balance concerns about enhancing magial weapons and armor.
However, the PHB (p. 148) says that the price of a silvered weapon is due to "expertise needed to add silver to the weapon without making it less effective.", and it is not clear you have this expertise, so spell it out.
Assuming this works, the value of this level 2 feature is at least 400 gp for a typcial party of four, and up to 700 gp. That is a nice boost, when the expected total wealth from finding treasure is under 400 gp for such a party. That is substantial, but not game breaking.
I think however, that for example allowing Adamantine would be over the top. An adamantine weapon (Xanathar's Guide to Everything, p. 78) costs 500 gp more than the normal version, and an adamantine armor (DMG, p. 150) is an uncommon magic item, major tier to boot, that removes all critical hits. According to Xanathar's (p. 135), a character should have at most 2 major uncommon magic items throughout tier 1 (levels 1-4), and here you could easily add one per character that wears metal armor, a 50% increase over the recommended balance level.
The economic abuse, by creating massive blocks of silver to dupe merchants, has been taken care of. I still think taxing all merchants in the world to wash silver with soap (or even know about this) is a bit much. It might be easier to say that the transformed substance has a faint magical glow to it (not enough to illuminate, but to be perceptible), which would naturally allow merchants to realize something is off -- even though I like the flavor of washing the enchantment off.