Hm... maybe there could be three kinds of inventory? Loot and primary weapons could be left the way that Mr. Fox described the latest implement. Then an inventory could be added for items which can be hidden while on a mission.
The breakdown:
1) Loot: [hammerspace] [teleportation]
loot doesn't clutter your inventory, but is automatically transported to the safehouse if anyone survives the mission (silly, but spares lots of hassle)
2) Primary Weapons: [dropped if naked] [no hammerspace]
This is most good weapons, rifles, swords, maces, flamethrowers. Anything small: handguns, knives, goes in the secondary slot. Not sure about cocktails and crowbars.
There is no hammerspace here, each squad member can only carry one primary and they complicate disguise (as already implemented). If you want to pick up another, you have to drop what you are carrying. Dropped weapons do not count as loot (silly, double standard, but I think it would work). Since you can't loot primary weapons without an empty primary weapon slot ("Liberal isn't desperate enough to use such a conservative tool!"), getting bigger guns is a little harder. It would be hardest, hopefully, at the end of the game, because guns are harder to find and you won't have as larger a stockpile from earlier.
3) Items: [dropped if naked] [has hammerspace],
This is secondary weapons and a collective squad inventory of small items.
a) secondary weapon, can be melee weapon, handgun or thrown weapons. Maybe there should be two or three slots? (So you can hold a handgun for shooting and a knife for melee counter attacks. Or so you can hold a handgun in each hand for +2 to badass and -2 to accuracy)
b) light weapons (INCLUDES: knives, handguns NOT: SMGs, swords MAYBE: crowbars, molotov), these can be freely swapped for the secondary weapon
c) ammo
d) "light" clothes (INCLUDES: "clothes", wife beater, masks, armbands, toga, green LCS uniform NOT: other uniforms, costumes, body army, suits, dresses; all too bulky to be hidden while disguised [except maybe a suit/dress in a briefcase])
Loot, needs it's teleporting hammerspace (for now at least), because otherwise you can't loot enough. Theft is one of the most straightforward (but risky) ways to gain funds, so gimping it would make the game harder for newbies and less balanced, IMHO. Hopefully, someone can come up with a witty rejoinder on liberalism that could be put in the game to hand wave away the inconsistency. With the right pun, inconsistency is a good thing.
Primary weapons lose their hammerspace (according to what Mr. Fox's implemented plan). This is where hammerspace is biggest impact, so if it's fixed here, hammerspace doesn't look ignored anymore.
While it could be possible to set inventory limits on the items category (possibly linked to strength/disguise), IMHO, that's not necessary. Besides ammo, which is small and light, you don't need to carry many of these types of items. Disguises and armor don't fit into this category, so you have to pick between being stealthy or armored on a mission. You can do absurd stuff, like have one guy carry around 6 desert eagles, but it doesn't really affect the game. And that equipment is expensive. Besides, it's COOL to be able to carry 12 knives into battle, or whip out a new handgun everytime you run out of ammo. Carrying 20 molotovs into battle might be absurd, but it's pretty damn liberal!
Potentially there could be a forth type of inventory:
4) Backpack Space:
This only applies if you don't give a damn about stealth, so you are fine with carrying around a backback full of dangerous stuff. If you are wearing a backpack, you can carry disguises, smgs, swords, etc. Backpack space items are dropped if you don a disguise. So basically the idea here is, you could storm into a new studio an AK-47 and body armor. You highjack the conservative media, and gun down the security that shows up to stop you. But you don't want to fight swat, so you toss aside your AK and armor, put on a business suit (w/ an smg hidden if it goes FUBAR), and slip past them disguised as a civilian. Right now, backpack space adds little to the game, so doesn't need to be added. But it's something to consider.