I entirely take your point: it is endless cans of worms (Russian dolls of worms? A bottomless worm pit?). And the ability vs equipment point is very clear (although I think you have sometimes made exceptions to this - Signature Weapon, for example, in FFKF). But I think the (admirable) ethos you promote in your games is the answer to these problems. Common sense and a cooperative spirit allow these things to work.
I'd say that traits like Heavy Weapon, Huge Weapon, Long Reach, Shieldbreaker and Flail self-evidently apply to the model's primary weapon. So if that goes, the model can either draw a secondary weapon if it has one or risk a free hack (or exploit a recoil) to recover its main weapon. Isn't that how it works in Fistful of Kung Fu? I recall having an oni chief (actually an orc, but never mind!) with Signature Weapon. We ruled that that was his axe; when he was disarmed, he lost the trait until he recovered the weapon, although he had a scimitar to use in the meantime.
Of course, if you have an orc with a two-handed axe and a flail in his belt, he should pay points for both Heavy Weapon and Flail (if he's going to use it) and be able to switch between when not in combat (or spend an action dropping the axe and drawing the flail). If you have an orc with Huge Weapon, I think it would be uncontroversial to allow him to drop it and switch to a scimitar in a particular situation (if his loss would lead to a morale test for the warband, for example).
Dual wielders are an interesting problem (not helped by the fact that ridiculous examples are far too common in fantasy miniatures!
). But I'd treat a dual wielder as still having to "draw" his secondary weapon (swap hands, adjust, etc) if he wanted to avoid Unarmed status. And he'd lose Block if he had it (if he remained Unarmed, he could keep Block).
I know that that's all "ragged round the edges", but I think the cinematic qualities you identify are too good to pass up! And for me at least, a little on-the-spot tinkering to allow for odd situations as they arise is part of the fun.