NPCs don't use hand-to-hand if their other melee skills were damaged during combat
Morrowind makes the NPC switch to using hand-to-hand combat if the melee skills they're good at got damaged to 0 during combat, OpenMW keeps them using weapons they can no longer use.
An OpenMW example, I gave this Imperial Archer an iron weapon for every weapon skill, and he kept switching to the weapon he's most skilled at using once the skill of the one he was currently using was damaged to 0 (which is expected), but then once all the skills were at 0, he didn't switch to using hand-to-hand combat but used his enchanted Iron Viperblade instead (which is the buggy part):
Edited by Abdu Sharif