Just checked it too. Has no effect on my char. But I was using my cheat save. Will try with good save.
Also When I press the right mouse button a drop down menu appears (handy <img src="/ubbthreads/images/graemlins/up.gif" alt="" />) But only with weapons and not with potions and etc. I find the dropdown menu handy for transfering items, so I would like the option for gettting the dropdown menu on all items.