When applying a special model to an item and it's displayed by one of the following entities, the item still uses the fallback model.

Attached is also an image and a test pack that shows the model does get changed if a different entity is marked as the holder type (in this case, a husk).

pack on:

pack off:

Affected entity types:

• minecraft:firework_rocket
• minecraft:item
• minecraft:item_frame
• minecraft:glow_item_frame
• minecraft:snowball
• minecraft:egg
• minecraft:eye_of_ender
• minecraft:ender_pearl
• minecraft:experience_bottle
• minecraft:small_fireball
• minecraft:potion
• minecraft:fireball

How to reproduce:

1. Load the attached resource pack (context_entity_type test.zip).
2. Summon a husk holding one of the above items by executing the following command:

   /summon minecraft:husk ~ ~ ~ {HandItems:[{id:"minecraft:snowball",count:1},{}]}

   → The snowball held by the husk uses the model specified by the resource pack.

3. Throw a snowball, or summon one that can't move by executing the following command:

   /summon minecraft:snowball ~ ~ ~ {NoGravity:1b}

   → The snowball uses the fallback model.