The way this could work is, you'd bind a key to the slot it's in while the item is equipped. Then, whenever you press that key, that item will go into that slot. You could bind multiple items to different keys in a single slot to easily switch between the items, and even bind a single key to multiple items each in different slots, so you can swap entire loadouts at the press of a key. Aside from keys, another option could be a pie menu brought up by holding the middle mouse button, or by right-clicking in empty space, or something along those lines. The item would still need to be in your inventory of course, unless you're in Journey mode and have it researched. (In this case, if you do already have it in your inventory, it would be moved from there. If you don't, it can set a flag so quick-equipping another item to that slot will delete the old one, so your inventory doesn't fill up.)
Applying this to the vanity/dye slots as well would create interesting possibilities, as you could essentially treat it like you're making multiple forms for yourself that you can switch between.
This wouldn't have any balancing concerns in singleplayer, as it wouldn't enable you to do anything you couldn't do anyway using Auto-Pause. If there are worries about this in multiplayer, it could simply be turned off for multiplayer. And if you disagree about singleplayer, you could even limit it to Journey mode, which is where it would be most useful anyway since you won't need to use inventory slots.
Applying this to the vanity/dye slots as well would create interesting possibilities, as you could essentially treat it like you're making multiple forms for yourself that you can switch between.
This wouldn't have any balancing concerns in singleplayer, as it wouldn't enable you to do anything you couldn't do anyway using Auto-Pause. If there are worries about this in multiplayer, it could simply be turned off for multiplayer. And if you disagree about singleplayer, you could even limit it to Journey mode, which is where it would be most useful anyway since you won't need to use inventory slots.