Whenever I click on and item to equip or unequipped, the game treats it as a single button click, when I'm holding down the button. This makes the game unplayable, since I can't change load out.

Hello there,
I'm experiencing the same issue and it feels quite weird, but there are several options to explore in another thread (https://www.gog.com/forum/shattered_steel/inability_to_change_equipment_in_the_arming_bay). Combining most of them together solved the problem in my case.