In general, what you're saying is valid but Xuan Shi and Ling Qi isn't really a good example. For one thing, I'm pretty sure Xuan Shi is one stage above LQ in the Green realm. Even if Xuan Shi didn't have anything other than his basic stuff prepared and was only able to use his regular arts, a fight b/w him and LQ would be a close call. Remember that in the underground mission, he tanked a hit from a Green enemy in the 6th stage. He wasn't even wounded from that first attack and after that, he was still able to go on fighting and defending his teammates for a while.
In general, you're correct that without their prepared items/weapons, crafters dont really match up to combat cultivators. However, that sort of thing can vary widely. If I recall correctly from Forge, when LQ, Su Ling and Li Suyin were fighting Huang Da, at the Red or Yellow realm Suyin used the fragments she had of her old family art--which she hadn't mastered or even fully pieced together--to partially dissolve Huang Da's respiratory system or something. Of course since he was a higher ranking noble, he was able to buy enough medical help in time that he was okay. However, it cost him a lot of money and took several days for him to completely recover.
Suyin at the time was upset that she was forced to use her family medical arts in a way that they weren't meant to be used but the point is she could be pretty badass and give Su Ling a hard time, whether or not she had crafted materials/equipment available.
So long story short, I wouldn't use Suyin vs Su Ling or Xuan Shi vs LQ as examples.