Excelsior

I saw someone at brit bank equipped with a two handed weapon and a shield. When i checked out his two handed weapon (Yumi) it said it was only a one handed weapon, how is that possible? Can i make a one handed Double Axe?!

yes it's called a re layer deed. 500 eds to make a 2 handed weapon into a 1 handed weapon

Mind = Blown

I thought i relayer deed transferred all the abilities from one item into another, like turning a Bone Crusher into a Shirt...

It does, but when you buy the deed you have two options, the one you mentioned with your example, and the second option is to transform a two-handed weapon into a one-handed one.

Can an item appearance deed change a shield into a shirt?

no but there are things like change the shield into a torch.