'Does not fit in Inventory' while inventory is empty

Killed all Champions in Pillar of Skull (Area Level 70 - Champion only Monotlith) and went to loot, except every single item says ‘Does not fit in Inventory’ while my inventory is completely empty.

Also end of Monotlith screen/zone still cannot loot.
Next Monolith zone is still the same, can however loot Affix Shards.

Player.log (3.1 MB)

https://imgur.com/a/6mKlIHd

Thanks Team.

ETA :
Restart/Update and looting is working again.
Player.log (267.7 KB)
Player-prev.log (3.1 MB)

Just had the same issue. My bags were completely empty and I couldn’t pick up the first drop (a Unique) in a map. Who knows why, but this is still an issue.
Player.log (550.8 KB)

Same issue. Exiting to desktop and restarting/relogging fixed the issue.

I can add more information that might be interesting.
In order to try and work around the bug I removed one item, in this case my belt, from my character and put it in my character inventory. This allowed me to pick up items for a while, but I also realized my belt had disappeared from my inventory.
I restarted the game and my belt was “held” on my cursor, catastrophe avoided, but still a very dangerous bug in my opinion.