Items are managed two primary ways:
The Inventory Menu allows you to manage everything you have. You can consume Perks, drop Items for teammates, equip Attachments, and more.
The Quick Inventory Menu will appear the first time you have something that you can Interact with in your Inventory. The goal of the Quick Inventory menu is to allow you to quickly change what you have in your Inventory for what you have Equipped.
You can change the type of Health item will be used when you heal
Activate a Perk Consumable
… and even change out Attachments on your weapons
The Quick Inventory is great when you are under pressure. Close the Quick Inventory when finished by using D-Pad Down.
Items in the world can often be equipped immediately without using either Inventory menu. For example, if you are looking at an attachment, the default action will be to equip it on the gun you are holding in your hands if that weapon supports that attachment. The secondary action, if your Inventory is not full, will be to add it to your Inventory space.
Additionally, Items will be auto-equipped in the order they were picked up. If the first Equipment you pick up happens to be a Frag grenade and the second Equipment you grab is a Concussion grenade, you will auto-equip the Concussion grenades when you use all the Frag grenades.