I have some buffs and some +item gear on (including weapon/offhand), currently displaying as +389.91%. If I equip a shining halo in a previously empty slot, mafia displays +80% item. Replacing it with a frosty halo changes to +105% item (the halo +item is counted when it should not be). Keeping the frosty halo on and taking off my weapon/offhand changes the display to +314.91% item (I had a lot of +item in my weapon/offhand, so this is correct).
Equipping my weapon/offhand again, and moving the frosty halo from slot 3 to slot 1 gives +65% item. Based on "modtrace item", it looks like modifiers through the slot with the halo equipped are counted (hypnodisk and sticker sword are ignored, but bottle-rocket crossbow is counted). Passive skills and effects are ignored, but the quartet is counted.
Equipping my weapon/offhand again, and moving the frosty halo from slot 3 to slot 1 gives +65% item. Based on "modtrace item", it looks like modifiers through the slot with the halo equipped are counted (hypnodisk and sticker sword are ignored, but bottle-rocket crossbow is counted). Passive skills and effects are ignored, but the quartet is counted.