After receiving the pistol from the guard in the cave, I cannot unequip it or break it down. The option isn’t even shown, and if I use the ‘triangle’ options menu from the inventory slot, the all options are grayed-out and unresponsive except for the ‘Swap’ option. I’ve tried reloading previous saves, restarting the app, restarting the console, and even restarted with a brand new play through over this. 
 

Thanks for any advice or solution. I appreciate your time. 

I'm pretty sure in the inventory menu, you can't unequip the item you currently have in your hand, which will have a gold color background in the weapon slot box. Maybe you need more weapon slots first so you can change weapons?

So, this was confusing... if you just click on a weapon you would like to equip, it goes into that slot(in your hand).. other wise it will take an empty slot first..

Drag the gun from equipped slot to bag space below.  This should unequip the weapon and allow for breaking it down. You can also drag a weapon from bag space over the current equipped weapon to swap them out.

1 hour ago, craigdelish said:

I'm pretty sure in the inventory menu, you can't unequip the item you currently have in your hand, which will have a gold color background in the weapon slot box. Maybe you need more weapon slots first so you can change weapons?

I believe you’re correct after some more play time. I think it’s a design choice so players don’t accidentally fully disarm themselves, whereas at first it seemed like the pistol was bugged. Thanks everyone for your help.