y4wwn: Oh my Gosh yes they do! thats amazing thank you. I don't know what Overwatch could be? Ill have to do some digging
Glad to help. :)
Sadly, a fix seems troublesome: by loading a save prior to the return-Skippy quest activating. You can safely put him on the wall before you "must" return him to Regina.
There is another solution, but that requires modding the game by using a character editor. Which is probably the easiest fix. I have already played around with my character and item stats a lot with such an editor.
A potential fix can be upgrading Overwatch through crafting. But that requires up to 18 points in Crafting, and can potentially leave you with more "quest locked" Overwatch rifles in your inventory if the quest status carries over on the crafted ones. All of which will permanently add to your carry weight.
I have modded my Cyberpunk 2077 install so hard, I no longer know what is a bug with the game and what is a bug with any of the mods...
Other than that, it seems to be an old bug:
https://www.reddit.com/r/cyberpunkgame/comments/kdkcsn/iconic_overwatch_sniper_stuck_in_player_inventory/
It has happend to me as well (when exiting Clouds, with the returning Skippy quest already active), but on a way earlier patch (1.06), and on a different unique weapon (as I didn't have Overwatch with me at the time), but I didn't know this was still an issue.
On recent playthroughs, I just put "him" (Skippy is a reference to the AI in the "ExForce" sci-fi book series) on my wall before the return quest comes.