Capitalism isn’t the same thing as free trade, we’re talking about literal individual markets. It could be a free market, the lord could be involved with workshops and give them exclusive rights, it could be a guild system, or he might just let the people do whatever

As for the means of production in the service industry… It’s the building, the fryers, the computers, the agreements with suppliers or customers… some of these things are more abstract, but if you swap out the people, anything that’s still there

Keep in mind, supply chains were pretty simple back then. You didn’t make shovels, you have a local blacksmith who takes in iron and makes what you ask for. But everything is done at the prerogative of the lord, if he decides you need to make something you do it, if he decides you’re overcharging he can set your prices, maybe you get ordered to take on apprentices

Think of the town as another resource - the lord gets more taxes the better the local economy is, but can also meddle in it however they like

Does the smith own the smithy? Kind of, but you could also say the smithy kinda owns the smith and the town owns the smithy and lord owns the town