Disclaimer : I'm french, my english might be a bit sorrowful to read, just so you know.

Hi, that was a nice story, I liked the format it was written in, sounds a lot like a campfire talk, and that work very well with the beginning of the conversation, I could almost picture them in the middle of a White Fang base.
The story was pretty fucking edgy, but it's okay, it's the origin story of a guy named "Banesaw", it can't be because his red fish died.

Actually, the only problems I have with the story are more plothole related.
Now, plothole in themselves aren't as bad as people say, and every story have some. However, the real problem is when said plotholes are so huge they take you out of the story.

I'll give a few examples below, all of them in the pit :
- the part about the pit, how they apparently throw his chainsaw with him.
- how the faunus that are down there never bothered to try and escape the pit before Banesaw show up.
- they also have tools to mine in the pit...which make sense when Banesaw was thrown with his Chainsaw.
- the way they escape the pit is really confusing, did they have rope and stayed in the pit ? And they have not tried to escape before ?
- the part where Banesaw climb the pit with a rope to escape and the pit crumble might have a metaphorical meaning (the guy literally breaking out of jail and out of his condition of slave) but the way it was written make me more think of the scene as a moneyshot from a blockbuster, which work difficulty in literature because you have to read the phrases, which make the action slower and less punchy, and it simply didn't work with your story because it is a flashback, there's absolutely no suspense about Banesaw's survival, which is the point of such a scene. As such, it is a useless detail and useless detail drag down the pace of the story.
There. That’s about all that bothered me at my first reading. I know it sound like a lot, but that’s normal, it’s your first story you are bound to make a handful of mistakes, trust me when I tell you that as far as first story goes, yours is both original (aside from Rabbit among Wolf I never heard of a backstory for Banesaw) and was enjoyable with a few details that are a nice touch (Banesaw being half-human is really nice, and how the nickname came to be is nice as well, a bit cruel of the grandfather to literally call his grandson a “Bane” but hey, I can overlook that, it’s not like it threw me out of the story and it even leave room for imagination, like how horrible must the camp have been, or that the grandfather knew who was the father and didn’t like the fact that his grandson was half-human, it might even be developed further in this second story you say you are working on.
So…no. not too shabby for a first try, although I’d recommend to use shorter sentences when describing action so it flows better, and try and have a beta reader, someone’s else opinion is invaluable when writing.
I wish you a good continuation

Okay, so right away, I have to commend you for going ahead and fleshing out an undersung character. The Lieutenant isn't someone most people think about when they think of RWBY the show, probably because canonically, there's not much there for him - we know he's loyal to the cause above all else and the he hates humans, with a particular distaste for the Schnee family, but beyond that, we don't know much. It's basically been up to the fandom to flesh him out beyond what the show gives us.

So, with that in mind, what do I think of it?

My first thought was, "This backstory is edgy as all hell". What does that mean? Well, it means it's kind of over-the-top - poor rations, debt slavery, a pit for certain Faunus... it's ridiculous. It's also fitting, I would argue - we know that in canon the SDC brands its workers. No, it doesn't make sense for them to treat their workers like that, but that's the show's problem, not your problem. Plus, if I'm being honest, Banesaw's backstory SHOULD be over-the-top and edgy - if it took a brand for Adam to turn out the way he did, then Banesaw's backstory should be even worse. I think, in that respect, you got the tone right - this is seriously over-the-top, which is exactly how it should be. I mean, can you imagine the backstory for Banesaw ending up being something like "Oh, we were stuck working for the SDC, but the wages weren't bad, the food was enough to keep us going, we weren't abused, the work was hard but not backbreaking, and the guards kept the Grimm away"? That'd make more sense than what RT gave us, but that's not what we got. You were working with what you had to go off of, and in that sense, I think it's fine. Edgy, again, but fine.

Now, I think there's one big thing missing here - where Bane's hatred of the SDC came from. We know he hates them because he showed an almost perverse joy at the thought of getting to kill Weiss when he encountered her on the train. I know you could extrapolate his hatred of everything shown in this chapter to include the SDC, but a hatred like that ought to have far more personal reasons behind it, don't you think? Here's what I think you could have done: I think you could have had the Schnee family - likely Jacques - be aware of what was going on in the camp, but refuse to do anything about it. He could have showed up to inspect the camp, seen what everyone there was going through (Bane in particular) and simply ignore all of it. If you wanted to be more personal, you could have had Bane's father be a Schnee. Not a main family member, but perhaps a cousin, or extended family member. That would have really cemented his hatred for them, I think.

Speaking of Bane's father, I really like the idea of him being half-human. I could see him trying wrestle with his identity, trying to rectify being treated poorly by humanity with the fact that he has human blood in him. I think there was an opportunity here to really delve deep into his psyche regarding his human side, maybe even culminating in him outright rejecting his human half due to the circumstances of his birth and his treatment by humans. Just something to think about.

Now then, some things I have to point out. I found it strange how nobody in this chapter aside from Bane is named. I get why you did it - he's supposed to be relaying a story to Perry, and it's not supposed to be super in-depth - but what stuck out to me was the fact that he speaks highly of his mother, or at least holds her in higher regard than everyone else. I think it would have made a greater impact to have her be the only one to actually have a name, or failing that, simply address her as Mother, while everyone else would get a title like "The steiger" or "my grandfather". if you wanted to show how highly he regarded his mother, that would help a lot.

The format overall is strange, if only because it's not something you see often. It's like the story is being narrated to us rather than told - more like a campfire tale than a storybook. It's not bad, just a bit jarring since it's not something I'm used to seeing. Honestly, I think that's my only real issue with it - it's not something I'm used to seeing. I wouldn't change it, but be aware that this format might be a turn-off to people who are looking for a more traditional story.

With my initial reservations about the format out of the way, you do something interesting with it by interspersing Bane's thoughts between many of the lines. At least, that's what I think you're doing - I can tell because the story will change from perspective to perspective when the text changes from normal to italics. Again, this is kind of odd because you don't see it often, but I think it actually works with this format - Bane is obviously telling Perry one thing while flashing back to the rest. He seems to spare his comrade the gory or more personal details, which makes sense, but at the same time it kind of undermines the setup. If he's going to go into detail about his name, he ought to tell the whole truth, you know? But at the same time, I think it works - having a big page of plain text would be an eyesore, and the italic text helps break it up. I think you did the most with what you had available here, so you'll get no complaints from me about it. I say the italics were a good decision, but if you do it again, maybe don't leave out so much with regards to what the other character is learning.

As far as first fics are concerned, this one isn't too bad. It's not amazing, but it's not complete trash like you keep saying (jokingly, I hope). It's your first fic, so obviously it's going to be rough in places. Trust me, everyone feels the same way about their own first fic; anyone who says they don't is a liar. Nobody starts off being good at what they do, we all start from nothing and work your way up. I say this is a decent first effort - you tried something unique and it turned out alright. It's not an eyesore, it's relatively easy to follow and understand, and it has some interesting ideas behind it.

So, what can you do to get better? The easy answer is for me to say "Write", and while that's correct, it's a bit of a cop-out. So instead I'll say this: you've proven that you're willing to try out an unconventional style, and it wasn't bad. I think you might want to try something more conventional, maybe some one-shots written like a standard story, just to get your feet wet in that department. Focus on your spelling and grammar, because that could use some polish - if you want a guide on how to work on that, the book 'The Elements of Style' by William Strunk Jr. and E.B. White would be a good place to start, since that's a good crash course in grammar. Keep reading, keep writing, and most of all, keep looking for criticism - you've been good about that last one so far, much better than I was when I started out, so kudos for that.

Overall, I think this was a good first effort. You have the potential to improve and be a great writer if you're willing to put in the time and effort. Don't quit - you'll get there in time, I know you will. We are all capable of doing great work, so long as we're willing to put in the effort for it.

As always, my inbox is open if you want to discuss this review further. I think I've laid out just about everything that came to mind when I read through it, but if you have any questions/anything you want me to take a look at/anything I might have missed, let me know.

Oh, and before I go - thank you very much for the shout-out. You didn't need to do that, but it's very appreciated.