Hi!
I want to lower the loot chance for all hats. Should I set the weight of each hat to 1 in the config file? There is a 'K' value, and I'm not sure what it means.
Thank you.

I don't know what "K" value you're talking about.
If you want to change the drop rate of one hat, modify its weight in the simplehats.json file.
Lower weight means lower chance.
If you want to change the drop rate of hat bags, change their drop rate in the general SimpleHats config file for Fabric/NeoForge, or use a datapack for Forge.