Items placed in hand from garments/backpacks place "In hand" indicator in said garment.
When the garment is removed your in hand indicator goes with it and shows a duplicate item that cannot be moved/used.
If you leave that garment and manage to drop the item it returns to the garment that you left behind.
Was only able to place another item in hand after returning to original garment, placing item in hand then removing from in hand and placing item in new garment before returning it to in hand status.