While playing normal survival I was mining some iron ore. There was a zombie close by who started to chase me at the same time I finished mining the ore. He picked up the dropped item as if it were a sword, or an axe. He couldn't actually do any extra damage, and the orientation was wrong. When I went back to kill him I did get the iron ore back. But I don't think they are supposed to be able to pick them up in the first place. I went into creative and tried to recreate this bug, however I was unsuccessful. Here are some screen shots as proof. Hopefully you will be able to re-create this, or at least take a look at the item pick up code for mobs, and see if anything is wrong. Thanks!