Is there a mis-print on the Grabby Guts card?
It's a little counter-intuitive, but "-1 Hand" is actually correct.  You aren't allowed to use more than 2 hands-worth of items; to check this, you can add up the number of "hands" on all your used items.

If you have two 1-hand items, "1 hand" + "1 hand" = "2 hands".  

If you have two 1-hand items, plus Grabby Guts, you'll have "1 hand" + "1 hand" + "-1 hand" = "1 hand", leaving you with one hand left.