I was playing with a friend for a while and everything worked fine. Not long after leaving the castle near Krasnatov, I found that I was unable to bring items from my inventory into my hands, so I could not eat or fire a weapon. Logging out and back in, and completely restarting my computer did nothing to relieve the issue. I also tried throwing to clear out the hand slot, to no avail.
Lastly, I split all the items in my inventory until it was full, then had my friend drop a hatchet on the ground to see if I could take it into my hands that way. No success. My hotkeys also did not work during this whole time, though I was able to reassign the slots on the bar at will