When you start with crafting you receive several crafting tools, one is a smith's hammer.

The hammer can be equipped in hand but disappears. Which is then irretrievable, being that you cannot grab the invisible item.

Your character cannot hold anything else in that hand due to the invisible hammer.

I've figured out how to remove the item in hand.

Using razor you go into hot keys, dress, and set up a key to remove items from your hands.

Easy fix for now.