When I use ctrl+G to hide the toolbar/quickbar, certain items are not visible when in your hand. Buildings (e.g. assemblers, electric poles) are still visible but items such as grenades and the repair tool are not visible when you have then in your hand. Repair sound is also muted when toolbar is hidden, although the repair procedure still works and the item being repaired still heals.

Can this be fixed so that hiding the toolbar doesn't hide anything the player is holding in hand?

That sounds like the api view setting hides more than it should.
I don't think this is fixable with a mod.

is it possible to have the tool belt visibility decreased like { Ctrl - } so it doesn't turn blueprint functions invisible when it's hidden. able to change what items can be place in one slot. and restore a slot to blank.

No idea what exactly you mean. Regardless this mod already does all that can be done to control base ui.

does the red and green message above the engineer also included in this mod right? Edit size of toolbelt from screen.
slots occupied can be erased.