

You can get the correct idea from the images.
Not sure if many others but I struggle sometimes with what im wearing, not for more than a minute but a struggle regardless. With this it should be way easier to see what you have on and would help a lot equipping the hardest items to quickly equip/switch properly: Accessories.
While this may seem a way to get off with 5 extra inventory spaces you can just keep what is now:
If the item is equipped, the square the item is on (in the inventory) turns blue, like it is now, but it also appears in the equipment tab. If you drag an item from the equipment tab to anywhere else in the screen the item should just unequip, not drop.
While dragging from the inventory to the tab the item just equips and the (inventory) square turns blue.