It functions in all zones, not only while a card that has it is on the battlefield
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In this situation, if you're Gaston you should absolutely avoid trading that Glass Golem for that Bronze Sableand if Belle has the opportunity to make that trade, she definitely should
At other times, they may have more cards in hand than their maximum hand size
The goal is to allow Steel, the color not entrenched in items, to play more creative decks that won't be forced to stick to an item focused deck, which was never intended
This meant that Theros needed Xenagos as a Planeswalker and then Born of the Gods needed him as a God