Confirmed [Indev 0.54.2] Losing items with Knock Off

When fighting against wild Lickitung on Route 44, it used the move "Knock Off", in doing so I lost the item Miracle Water. (I believe I lost the Amulet Coin as well because of this, likely fighting Team Rocket in the Kanto arc, but I can't remember when precisely)

What I expected to happen:
When the move Knock Off is used, I expected that the item held by my Pokemon is to be "removed" from game-play until the end of the match:

"Knock Off inflicts damage and removes the target's held item. If Knock Off would trigger an item (such as Focus Band, Focus Sash, or Colbur Berry) after the attack, that item triggers before Knock Off removes it (unless it was already consumed). Once the item has been removed, it cannot be used throughout the battle and switching either Pokémon out will not cause the target to regain its item. It will not remove items from Pokémon behind a Substitute.

After the battle, the target will regain the knocked-off item."

What actually happened:
I lost the held item permanently.

Steps to reproduce:
Fight any Pokemon with Knock Off (such as the Lickitung on Route 44).