This bug actually extends to any stackable items which degrade, including jewelry (power level), and weapons, hammers, anvils, etc. (durability). The issue is that the client stacks items which have degraded in this way, considering a Competent Anvil in perfect condition to be identical to a Competent Anvil with considerable wear, but the server does not. The first item on the stack is then able to be picked up, but since the client lumped them all together, it no longer retains the differing conditions and so the server can't find the second one with the information given.

In the interest of retaining accuracy to ensure the correct item is always selected on the server according to what the player chose, this has been fixed by preventing deteriorated items from stacking, rather than making them indistinguishable to the game.