I really like the idea of climbing rope. I enjoy the physics of it (that you can swing around and control your height... it vastly increases the immersive utility for the purpose of platforming). It feels so adventurous to swing across gaps and stuff, instead of placing a block bridge or using a straight line grappling hook like in Terraria. However, its utility is vastly decreased by the fact that you can only use it for movement. It would make sense to use it to scale halfway up a wall in order to reach an ore deposit, as opposed to having to use tech or place blocks. While I like that the utility equipment in Terraria requires the use of a hand (and would like to see it expanded eventually to include many pieces of neat unique utility loot), being able to deequip the climbing rope (in order to take out the MM or a two-handed weapon) without breaking its connection might help it actually see some use.
I think one possible good solution would be a dedicated slot for a "movement tool". The grappling hook would use that slot. Maybe as a 5th tech slot, or a 4th dedicated tool using the G key by default. That'll mean more keys, and that could be annoying, so maybe it could be optional. So you can either use the item as a tool, or equip it in the dedicated slot, depending on your preference.
Or allow us some sort of way to make the MM tool or make some other tool, which can be used with one hand (For the Manipulator, this'd be an upgrade that would likely happen after the 2nd size upgrade or something, allowing it to fit in one hand). Personally I feel that if we were to assign the grappling hook to a key, it would get worse, because we would then have another key to use, and personally we just don't need a key for grappling hooks, it works very well as a left or right hand item. The fix of this (if there ever was one) would be to change something else, like create an arm-mounted drill.