Wielding a Weapon Versus Holding a Weapon

[Chronikoce]

That's not what I was asking for. I'm talking about freely swapping between two weapons. Switching from two-hand to one-hand is a free action. So why would two weapon fighting not apply to this? Clearly they would have two weapons. Both intended to be used at one point.

Are you using the two weapon fighting rules or iterative?

If you are using a full attack to two weapon fight then the penalties apply. If you are merely using iterative and changing which weapon deals damage then you are not engaging in two weapon fighting and the penalties do not apply.