I agree with most said here. Compared to how well made most things are in BG3, im shocked how bad the inventory system is.
Some thoughts I had. Make the item slightly bigger (20-25%).
Get rid of the 2 click category ( click arrow, click category).
Instead it should be a row of icons representing each category.
When viewing all items and sorting by type, add some kind of separator for each category.
Had some more ideas during play, but can't recall other for now.