The math behind the Handholding Shader IK has unknown behavior when the distance is shorter than the difference between forearmLength and upperarmLength.
From a quick analysis, this would cause the input value to either acos_c or asin_c to be an invalid value out of bounds of the acos and asin functions, but since acos_c or asin_c have clamped inputs, this may have alleviated the issue.
It would still be good to verify and define the expected behavior for this case.