TL;DR That's the problem that stopped me from finishing.

Long: That was the issue that sidelined my progress long enough to keep me from finishing. I understand roughly what the problem was--I built my VR game interaction system around picking up items that exist in the world, not creating and dispensing new items into a hand.

The spawn plus grab causes...unpleasantness. I think it's because the item is kinematic until a grab is triggered, but there is no logical reason why the character Rigidbody should have upward force applied, and it was not nearly so pronounced in the editor so I am guessing it's frame rate dependent.

I'll be replacing the whole interaction system for my next iteration.

If you want to get a chance to try the mechanics, you can hair-trigger tap the button to minimize launching and it does make an item drop out.

Interestingly, if you put your hand on the dispenser while holding an object, it will just drop more out at 1 per second (that's a long story).

That's how you can actually try the mechanics that are SUPPOSED to be in the game 😝