So I dual-wielded steel swords and it was fine for me. I assigned both to hotkey "1" so that I could just double-click "1" on the keyboard and I would be dual-wielding.

Then I upgraded them on the forge to fine Steel Swords and what happened? They are now two seperate Items in my inventory, even though they are called the same, look the same and have the same stats. And the worst is that if I put the one sword on hotkey "1" and the other in "2" and click both of them it won't give me dual-wielding but instead replace the steel sword from "1" with the one from "2" immediately in my right hand, while my left hand is still unused.

WTF? Do I have to go open the favorites menu and scroll through it and break immersion every time I want to dual-wield? (And I have to change a lot since I use bow dual-wielding and a bit of magic).

I've found that the game doesn't like hotkeys with when dual weilding identical weapons. It often removes the second weapon from my favourites list for some reason.

The hot keys appear to be working fine if you have two different items to dual wield though.

If I use two diferent items then the second item will just replace the first one in my right hand. Is there a way to change this?

It's bugged I think.

Select the weapon you want in your left hand then use the hotkeys to change whatever you need in the right.

Therefore allowing you to swap between a sword and spells, etc. However if you change to a two handed weapon it breaks it all and you have to manually select the left hand item again.

Yeah the hotkeys really aren't great for dual wielding.

@Commander: Then theres again the problem that all magic spells are for some reason automatically assigned to the left hand ...

I posted about this a while ago, here's what I do;
Hotkey your bow, I used 4.
Go to your favorites list and put your one handers in each hand. Exit the faves menu.
Now, press your bow hotkey (4) and you have your bow out.
To change back to two hand, press the bow hotkey again. This puts the bow away and restores the last config you had (two hander.)

If you need to heal then you will be forced to use the faves menu to get your left hand weapon back.

That's my workaround.