One example I like is Dredge. If you took away inventory management from that game, you would basically destroy its whole economy and progression system. It would also get rid of the interesting way they make having tons of equipment mean you can't carry as much at once, creating a tradeoff.
I think one thing people get mixed up is the limitation side of a limited inventory -- which is often a good thing for creating choices, tension, and pacing -- and the physical action of sorting and arranging an inventory. This second one is a perfect place to streamline in my opinion because while the limitations on inventory create meaningful choices, having to spend a while rearranging your stuff to fit something in is very rarely good gameplay. You might already be making this distinction, but I wanted to clarify that just in case.
Inventory size/weight capacity is essentially a resource to manage, and I'm a big proponent of resource management in games (and this is coming from a designer who tried to get rid of and streamline resources for years -- it has some major downsides).
Have you succeeded in making things less crappy? I've been debating the upgrade for a while and I'm basically hoping this is possible by the time I do it. I already use shutup10 on win10, but I wasn't if win11 kneecaps it somehow or not.