I was in Port San d'Oria and I saw a guy lose a Goblin Helmet, then immediately afterward he made an iron mask. He didn't answer my tell, but I'm pretty sure that he was making the iron mask using the helm.
Goblin (and other beastman stuff) can be broken down into components (like ingots and stuff). Most likely he was breaking the helmet down to get part for the iron mask.
You can 'de-synthesize' many items using a Lightning crystal and, in some cases, a Wind Crystal. For instance, breaking down Yagudo Necklaces can yeild eithe Copper Ingots (Lightning) or Grass Thread (Wind).