Selling the unneeded items would normally be the case, yeah, however there's numerous reasons why the player may choose to keep such items anyway. For instance, they could be manufacturing materials, or items that can later be upgraded, or they're shared as craft armaments, or don't have/can't produce ammo yet, or the player is keeping an item sample for a later research, etc.; I know the unwanted items could be temporarily moved to another base, but that's not always possible, nor is it convenient.
On the craft equipment list screen, the marked (greyed-out?) items always appear, the only thing that changes is their color. Unmarking them would be the same as marking them, for instance, with a right click.
In the inventory screen (outside any actual battle), the hidden items don't appear on the Ground. As for already loaded items... it would probably be simplest if, upon marking, they're unloaded from the craft and removed from any saved soldier inventories. While an item is hidden, it cannot be added (saved loadouts included) to a craft. If a player marks an item as hidden, it implies they don't intend to use it in battles.
