Martym, you seem to be unaware that you are allowed to still carry (i.e., have on the table) Items that you aren't using. In order to indicate the Items you aren't using, you turn them sideways. You can even play them to the table sideways if you need to. Big Items are a little different as you are limited to carrying one Big Item, so turning one sideways does not allow you to play another (Items in use are also considered carried). The other restrictions of using two Hands and one piece each of Armor, Headgear and Footgear do allow you to stop using whichever Items you don't want to use to create your most favourable setup.
So here is a valid order of plays of the cards mentioned that gets him to his best possible bonus.
- Start with Sledgehammer of Smackdown. Free Hands = 0, Bonus = 5.
- Stop using Sledgehammer of Smackdown by turning it sideways. Free Hands = 2, Bonus = 0.
- Play Fire Arms. Free Hands = 2, Bonus = 2*3 = 6.
- Play Two-Handed Sword. Free Hands = 3, Bonus = 3*3 + 2 = 11
- Start using Sledgehammer of Smackdown again by turning it back upright. Free Hands = 1, Bonus = 3*1 + 5 + 2 = 10.
Of course, you would not bother with that final point of equipping the Sledgehammer again, as you get a better bonus from having those Hands free, but this lists all the potential bonuses the player could have and the order of the actions is legal in each case.