It's easiest to see when standing still or walking with your weapon sheathed.
Not sure if this is intended but by the looks of the body versus the animation I'd say it's not as it really looks silly walking around holding your arms two feet from your body.
Edit:
It also seems that when you get overencumbered your should normally still be able to walk but not run around, but with the Orc females you can't move at all anymore.
It really seems as if they forgot to set something for them.
