Vanilla Minecraft now intends to support HD texture packs. HD blocks render properly but HD items do not. Held items (or dropped items when fancy graphics mode is enabled) render their thickness with 16x16 resolution, causing the edges to not match the face and look "jagged".
To reproduce, use a texture pack with resolution higher than 16x16, set graphics to "fancy" and observe any dropped, framed, or held items.
Duplicate of MC-6951, please use the search function to see if your bug has already been submitted. Currently over 45% of tickets are being closed as duplicate.