Forgot to mention here ages ago that we have fixed this.
Took me a bit to think of the best way to solve it. Obviously we could just disable damage to all weapons that are not held, but we want weapons for feel dangerous still even if they are on the floor.
In real life if I went up and kicked a sword on the ground, the results could be not pretty. I have to kind of respect the weapon if I do not want to get hurt. Of course on the other hand we don't want a player to kill themselves like in your example vids haha.
We I ended up doing is making it so weapons have a minimum velocity required for them to be able to cause damage if they are not held. If they are held then they can always cause damage. This has also solved axe-cleaved weapons being unable to cause damage (if you have an axe, then cleave into a hammer, then hit someone with the hammer by swinging the axe).
The update is already pushed.