Playing the 1.0 version, I skinned and quartered a chicken with a kitchen knife. After this, the knife was permanently stuck in my hand, and i was unable to exchange it to anything (the icon was red, as if the knife was still in use. I ran around, and waited it to go away by itself, but it didn't. I went to hiding in a bush, trying to get rid of the knife which i managed to eventually do by placing it into vicinity. Then the knife got stuck in the bush, and disappeared. I mean, It was visible but there was no way to interact with it again. Also, it made the bush bug also, I couldn't cut the bush down with my axe. So the knife broke the inventory, and the bush, and was lost, that's the thing in a nutshell.