By a couple of instances, I mean that on occasion I still need to grab the blank contract, use it outside of the inventory, drop it back in, drop the item on it for it to work, but most of the time it works now like your gif.
My mod list should be in that log file I uploaded last page, that's the tModLoader log that shows all the mods loaded and everything going on (there were a lot of mods, to list them would certainly take time).
I'm not using the 32 bit tModLoader, I'm using the 64 bit version on this very forum, it allows more than 2 gigabytes (I have a 16 GB RAM). With 32 bit, Terraria crashes if you try to load, say, Calamity, Thorium, W1K, Sacred Tools, Joost, etc big mods, it can only handle about 4 big mods and a bunch of small ones, after that it just has an error loading (out of memory) or outright crashes. Since I learned about 64 bit tModLoader, I've been running multiple big mods and many small mods. Takes a while to load everything, there are stutters and pauses, but it doesn't crash or anything. However, the game does run a bit slower than it should (especially around crafting tables and such, so many recipes) and has hiccups occasionally (lag spikes), which is why I initially mentioned the game being slow might have to do with the blank contracts not interacting with the item properly. Since disabling mods, it runs closer to normal speeds with rare lag spikes.