Mercenary can't equip weapon, but slot is green

I have a Mercenary (Infamous Sanguimancer, Lvl 83) and I wanted to give her a Cold Iron Point. When trying to equip the item, the weapon slots are shown as green, but clicking won't actually equip the item.

I tried with other weapons (non-unique and different types). After some playing around this is what I found:
- Wands show the slot as green and can be equipped (expected)
- Regular Daggers show the slot as red and cannot be equipped with the regular "cannot wield" error (also expected)
- Rune Daggers show the slot as green yet cannot be equipped (seems strange to me)

Looks to me like there might be some strangeness distinguishing Daggers from Rune Daggers?

Feel free to ask for more details.
Cheers!

I have a Bladecaster (came with Rune Daggers) and am having the same issue attempting to equip wands on him. The slot highlights green, but it won't equip. There isn't even an "incompatible weapon type" error message like when the highlight is red.

I believe Rune Daggers are for melee spellcasters while regular Daggers are for melee attacks - which is why they're different. So Rune Daggers and Wands should be interchangeable (like the green highlight shows), but it's bugged.

If you equip a weapon of the same type the merc is using, it will delete their default gear. Then you can put whatever equip-able weapon on them.

The reason you can't equip a different weapon type, is you can't mismatch weapons. So you can't have a wand + scepter for example.