Cant change equipment while bag is full
I see how it could be a bug but, taking it at logical viewpoint, it happens because your current gear is taken off and sent to inventory and then the new one is taken from inventory and wore (you can see it’s true as the item taken off pops up at the right side, as if a new item was acquired. You can even see it in chat too and it even says something like “You received a Sword.”). That’s why you can’t do that, because the current one can’t be sent to inventory. I believe that behind the scenes this is the reason for this behavior. But yes, I also don’t know if it’s intended or a bug.