I did a google search and found some old threads with the same problem but with no resolution.
The only solution in game was to level up, and that seemed to fix things.
I play with my friend, he always hosts. When I load in, everything looks fine to him, but all my stats are 5 and items which require higher stats are removed.
I believe the numbers used in battle are correct, it's just disorienting and disruptive as I cannot equip new items, hit chances are miscalculated.
It makes playing with my friend a very hit or miss affair and is quite frustrating. Sometimes restarting everything fixes it, sometimes it doesn't.
