Anyway here is the deal:
Regardless if you use Keyboard and mouse or a 360 controller the same exact thing happens with both For the record I am using a 360 controller.
What's the point to the hotkey system when you can only get a one time use out of it?
For example, I will add an axe and bow to the favorites menu, I will then press and hold Left on the D-pad on the controller to hotkey the Axe and it shows 1. next to it on the left of the text shows up next to it denoting I have hotkeyed the Axe to the left directional on the D-Pad. I then hold right on the D-pad to hotkey the bow, and a 2. left of the text denoting I have hotkeyed the bow to the right direction on the d-pad
Now when I get back into the game I press Left on the D-Pad and My character Switches to the axe I had hotkeyed, I then press Right on the D-Pad and my character switches to the bow I had hotkeyed.
So far as expected this is what is supposed to happen... however now when I press either left or right on the D-PAD neither one of those items are able to be witched to any more using the d-pad...I literally have to go back into the favorites screen and rehotkey those same items in order to be able to switch to them again.
So again this is the dumbest thing in this game......There is no point in having a hotkey system you can only use once they never should have incorporated this game mechanic in this condition.
Anyone in Bethesda staff or the devs care to comment on what purpose a one time hotkey serves?