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I have a weird bug where if I return to the city after having been to the hub, I get trapped in Jennas's room and get the "can't leave without my gear message" whenever I try to get out, despite wearing all the gear. Because of that I  get stuck whenever I try to retrieve the suitcase armor.

You need to put on the badge, it might have gotten unequipped somehow.

When do you plan on making us able to unequip the badge and go around town "greeting" the townsfolk

We're planning on doing it, but we haven't gotten around to it yet. Not sure when we will find the time to implement this.