Shortly after spawning, I drag-dropped the flare to my hands and then ignited the flare using the action key (F). I ran for a bit and then threw the flare using the throw key (G). The flare stuck in mid air.

After a few minutes, I came across a pickaxe and dragged it onto the character equipment side of the inventory screen and it attached to my back. I was unable to drag it to the hand slot, or equip through double-clicking it on my back. I was able to drop the pickaxe and put it back onto my back, but unable to hold it. The same issue applied to trying to hold regular items (cans, bloodbag, etc...).

Unable to confirm if this issue resets when you relog, as I was killed shortly after that.