Forge 1.10.2-2221
Metamorph 1.1.1

While morphed, items don't show in their hand, for both vanilla and modded morphs.

Yes, it's intended, unless you're talking about morphs like zombies or skeletons. Items rendering is working on entity's renderer end, there's nothing really I can make about it. Previous versions of morph had items, because they were custom models, actually. I'm going to bring them back, though.

Ok, and I hadn't tried the zombie or skeleton, only the creeper, which could hold items previously, and modded mods. That would be cool though if you could see items and armor on all mobs.

Ok

Yes, I removed patch entities category, because it looks kind of wrong to have only two morphs who have custom models.