Oh hey, I isolated and reliably replicated the hammer head cracker launcher issue.
It's related to the being grabbed while hammering thing. When you do a dash attack near an item, normally you pick it up and continue with the attack until its finished, but the Cracker Launcher interrupts the animation, causing Mario to continue to hold the hammer until he lets go of the Cracker Launcher.
Upon further testing, it seems the Cracker Launcher is the only item that causes this behaviour, all other items will let Mario do the entire hammer spin after which he puts the hammer away. The only strange anomaly is that throwing items will alter the angle at which Mario holds the hammer.
No biggie, just a heads-up.
Also bonus points if at some point it can be made so that Mario swings his hammer in tandem with the Hammer/Golden Hammer the way Dedede does