What you are seeing here is the new UI for 'Building Mode/Precision Mode' (name TBC). Now when you're in this mode, you get your 'best' of each of the five tool types autoselected in the left pane. The right pane shows all of your buildable/placeable items in a scrollable list. This means you've got immediate access to EVERYTHING on one screen, and there's no requirement to swap back to main inventory to select your next item.
The sixth and top slot on the LEFT is a weapon slot. This was added into the game after we produced the EGX demo build, and is the further UI evolution I mentioned before. That slot will be autopopulated with your currently selected weapon when you go into that mode, but tapping on that slot will cycle all your available weapons in that slot in inventory order.
The goal is to give you everything you need to make building as intuitive as possible, but also give you the possibility to switch to a weapon quickly if you need to quickly batter something.
I realise all this is new functionality, but it works really intuitively.
Oh, and the arrows as part of the pane hide and unhide the UI as you require it. These panes don't overlap the buildable area so you may never need that functionality, but some of the devs like it