Hello,
I was testing out the sharp melee weapon stealth kill on zombies, first with a hatchet--didn't work, so I switched to knife, and that didn't work but it also alerted another zombie. I switched back to hatchet for the fight, and ran into a house. I tried to swap out hatchet for a gun, didn't work. I tried dropping the hatchet in my inventory, which was only 40% full, and that didn't work. I tried dragging weapons over to Swap via the option, and that didn't work. I tried dropping the axe and that didn't work either. I could pick up items however.
I logged out after realising I was bugged and am about to log into another server, to see if it is corrected. I was in SG 6064 and it was 9pm Melbourne time.