This problem still exists. It affects tools and even weapons. There are times my tools just swing horizontally and will not strike whatever it is I’m harvesting unless it is elevated high (i.e. the item is on a higher elevation than me, then the tools can strike it).
This also affects weapons, as enemies that are shorter in stature like spiders, hyenas cannot be hit by certain attacks. It’s absolutely infuriating seeing my pikes, 2 handed hammer, etc. swing uselessly overhead of the enemy. The only thing remotely viable are 2 handed swords because the attacks like to scrape along the ground by default.
I have a similar thread when it was affecting my Hoar-Frost Hatchet, but it affects other things now.