when you pick the item you can:
- make a ‘find look at rotation’ from the object to the camera. This will give you an FRotator (orientation info). then you:
-Create a 'Scene object '(null transform object) in the objects position
-Set the world rotation of that ‘scene object’ with the rotator so this scene object has the right orientation regarding the camera.
-parent you original object to this scene object
-move the ‘scene object’ LOCALLY (add local offset) in the right local axes depending on your mouse movement.
-when you release the mouse you can unparent and reparent were needs, also unparent with keep world on transforms.
Hope it helps