If you assign someone to carry a weapon that's two handed, they will initiate an unending chain of pickup equipment. The same happens when a woodcutter is assigned woodcutting and decides to pick up a two handed axe. They'll use the axe to cut trees, then drop the axe and initiate the pickup equipment loop.
Changing him to carry 2 weapons corrects this (even in the case of the civilian woodcutter), allowing him to use both hands for the one weapon. It then shows up as multigrasp and works fine. This part of the handling is fine, it makes 2h weapons function as two handed and prohibits the use of shields, it's just the endless loop of pickup equipment that causes issues. Perhaps a check to make sure they don't try to pick up 2h weapons if not set to 2 in the weapons list? That way they could stop the unending loop and just go grab a one handed weapon of the same type if they aren't set to use 2 hands.
This doesn't affect standard weapons and dwarves (they have no two handed weapons, due to the way the raws are set) but affects humans or modified weapons.
On another note, the ranged weapons - bows, crossbows, etc. - are all set to [TWO_HANDED:0], but the way the system works that makes them never act as two handed. Shouldn't this instead be a high number like 10, thus making them always two handed? I tried this and it works, they still use them but must always use both hands. This prevents the silly ability to issue marksdwarves shields and have them just as effective as melee dwarves. You do have to set them to #:2 to prevent the endless pickup loop, though.
This whole thing has probably been around since the beginning, I just never noticed it until now so I put 40c.