If you have a knife in your sheathe, and that knife is on hotbar, you press a key to take it out.
Once the knife is out, and you select a pistol from the hotbar, which is in your backpack, instead of going back to sheathe, knife will go to the spot of the pistol in the bag, making you unable to return pistol if your backpack is already full. Then you have to press the knife hotbar key again, to take it out of bag (which puts pistol back to its previous place) and if you press that knife hotbar key again, only then it will go back to sheathe.

I haven't had a chance to test it out with other items from the belt, such as canteen, and pistol holster. It may have the same issue. Please check it out.