Skeletons with CanPickUpLoot can no longer pickup swords if they are already holding a bow. Previous behavior: Skeletons will swap out to a sword even if they are holding a bow, as long as they have CanPickUpLoot.

This behavior was a useful mechanic in Minecraft, as Skeletons were the only hostile mob other than Piglins that could fire an arrow, and could also swap to a sword, now there are no mobs that can survive in the overworld that can fill this role.

Through testing, I was able to determine the change occurred in version 1.21.4, in all previous versions down to 1.20, skeletons will swap to a sword if they can pick up items.