Does the Two-Handed Sword Take up a free hand?

[Blazinjsin]

You have 2 hands. Yo are holding a 1 handed sword which gives 2 additional hands. Thus, if this is the only weapon you are holding, you still have 3 hands left. You may lose this item to anything that it qualifies for as a weapon, but until then, you have one more hand than you did before equipping it. If you lose it in some way, all hand related items that it was carrying drop to the ground (right in front of you, which you immediately pick up (not optional)). After this, you are back down to 2 hands, and may move equipped items around normally.