I opened a chest with an iron sword in my first hotbar slot (mostly used, probably about 20% left). I put an iron pickaxe back into the chest, and exited the chest. I went to switch to my iron sword but it had become stone (and mostly used, enough that there was no red color showing anymore).

Important info: I also had a mostly unused stone sword a few slots later in my hotbar.

Seems kinda similar to the bug in the past where items in your inventory would duplicate and destroy something else :/