The hammer should be drawn above Link with the behind flag unchecked but it doesn't.
[1266] Unchecking the "behind" flag on hammer doesn't work
Actually the Hammer has always been behind Link, well before that flag was added. Furthermore there isn't a 1-to-1 relationship between weapon sprite entries and items, so it isn't really possible to add this functionality retroactively.
Oh.
Well, the 2nd down sprite of the hammer, and maybe the 2nd up sprite if I remember, become pointless since it's drawn behind him.