Currently, they intersect each other, which I'm not sure looks the best; I don't know if we could offset them and the hand positions, or possibly even just fall back to the vanilla way of holding items for this specific case (one in each hand, pointed forward)?

This might be doable, I'll look into it at some point

When holding 2 plushables the arms will now deform outwards like so:

Behaviour when holding one plushable stays the same:

Fixed in e19d534