Looked in to it. It's not a problem with the mod but the game itself. Seen it happen with other mods as well, seems to be only for new daggers added by mods, occasionally the AI will fail to equip it and just bug out and not attack. Not anything I can do other than remove the new daggers, but it's rare enough (at least on my play testing) that I think it's okay to leave as is.
Surprised you didn't notice the "Every single bandit has three crafting books in their inventories bug". That one was a little more prevalent.

Okay, here it is the first release candidate.
Downloads:
http://www.mediafire.com/?7twpauazgq5kzme
Changelog:
Craftable Forsworn, Falmer and Imperial.
Arrows more or less balanced for now.
Several fixes to the leveled lists.
Smith tree prettied up.
New item meshes for arrow fletching/shafts and weapon hafts.
Changelog from v8.4:
All Weapons Crafting and Tempering.
All Weapons added to leveled lists.
Arrows craftable.
Overhaul of crafting to require cut gems for weapons with gems, hafts for weapons that use them and new tempering materials.
All weapons have stats and values determined by style and material.
Silver Smithing perk added.
Restructured perk tree.
New code for silver weapons, 1.5x damage instead of flat +20.
Crafting styles unlocked by books.
Imperial Falmer and Forsworn weapons and armour craftable.
If no one finds any hugely glaring bugs in this I'd say it's done for a v1 release.