Upon some further experimentation, it seems the glitch is caused by dragging a battery to the right of the flashlight refill. Doing this causes the battery to sit there permanently, and you can no longer drop items
i enjoyed playing through the game, but i encountered a bug where dragging an item out of my inventory wouldn't drop it, but cause it to float on screen as if i were still dragging it, then eventually the item would de-spawn entirely. Couldn't finish the game because of the glitch