Playing on standard official server on xbox one with persistence setting on, occasionally the game will glitch out and you can no longer pick up or use items.
Was playing in the forest, then I couldn't pick up any of my zucchinis unless i put them in my hand first then manually moved them to my inventory (which had space). Then i played around more in my base and burried some chests, then put my shovel away and dropped some items on the ground. I then tried to dig up another box, the action loaded but didn't complete, then i wasn't able to activate the animation again and was stuck in one spot. I waited 15 minutes hoping it was a massive lag spike, then ended up quitting and rejoining.
When i joined back i noticed my zucchinis were flooding my inventory, half the zucchinis i already harvested were now unharvested (as if it rolled back...but it wasn't cause the server never shut down or restarted) and the items on the ground despawned (They were rather valuable may i add) and my shovel decided to disappear from my inventory so did some other items here and there throughout my inventory and now I'm stuck with all my good items in the ground :)

TO OTHER PLAYERS READING THIS
if you stop being able to use animations or items, QUIT IMMEDIATELY and rejoin to prevent losing any further items and progress

Putting this on major severity because with this bug, you can lose weeks worth of work just through random item deletion from inventory (which is what happened to me...) which handicaps players and discourages further interactions with the game.