Daggerfall Workshop Forums

That's some difference with classic Daggerfall that Grimith noticed, and that I later checked:
In classic you can use REMOVE on a equipped item to put it directly in the remote list; In Daggerfall Unity you need 2 steps: you must first unequip it, then REMOVE it from the inventory list.
Given that something that obvious has probably not escaped scrutiny, and that it doesn't seem too hard to implement either, am I right to suppose this was changed on purpose? Say to avoid mistakes?

Yep, this is intentional to prevent accidentally dropping something you have equipped.

It's a minor inconvenience though when repairing or identifying.