How do the requirements to maintain a grapple contrast against the requirements for initiating a grapple? For example, if a paladin successfully initiates a grapple against an orc (using one free hand, per the rules), and the paladin subsequently uses both hands to grasp his greatsword to attack, does the orc cease to be Grappled?
In terms of storytelling, this could go either way; either the paladin must keep one hand on the orc, or the paladin is allowed to maintain an already-established grapple by (for example) hooking an arm or leg onto the orc.
The rules require a free hand to start a grapple. The mental image is that the orc can't walk away because the paladin used his hand to grab the orc. This can be intuitively extrapolated into the paladin maintaining the grapple with his hand, but the rules don't explicitly say that this is what happens.
I added bold italics to the bits I found most important.
When you want to grab a creature or wrestle with it, you can use the Attack action to make a special melee attack, a grapple. If you're able to make multiple attacks with the Attack action, this attack replaces one of them.
The target of your grapple must be no more than one size larger than you, and it must be within your reach. Using at least one free hand, you try to seize the target by making a grapple check, a Strength (Athletics) check contested by the target's Strength (Athletics) or Dexterity (Acrobatics) check (the target chooses the ability to use). If you succeed, you subject the target to the grappled condition (see appendix A). The condition specifies the things that end it, and you can release the target whenever you like (no action required).
Escaping a Grapple.
A grappled creature can use its action to escape. To do so, it must succeed on a Strength (Athletics) or Dexterity (Acrobatics) check contested by your Strength (Athletics) check.
Moving a Grappled Creature.
When you move, you can drag or carry the grappled creature with you, but your speed is halved, unless the creature is two or more sizes smaller than you. (PHB p.195)
The way I see it, there are two distinct concepts: there's The Grappling procedure, and there's the Grappled condition.
The first half of this text is describing the Grappling procedure. For example, this procedure has certain requirements (including a free hand).
Then comes the sentence, "If you succeed, you subject the target to the grappled condition." This is the connection between the Grappling procedure and the Grappled condition. The Grappling procedure is how you apply the Grappled condition to a target.
The text that comes after "you subject the target to the grappled condition" is about the Grappled condition. I don't believe the earlier text (about the grappling procedure) applies here-- but even if I'm right, the text could have been written more clearly, perhaps by explicitly defining the difference between "Grappling" and "Grappled".
In case anyone was hoping the "Grappled condition" rules would help clear this up, here's from Appendix A: Conditions.
A condition lasts either until it is countered (the prone condition is countered by standing up, for example) or for a duration specified by the effect that imposed the condition (PHB p.290).
Note that, in the example given, the Prone condition is distinct from whatever event caused the Prone condition.
- A grappled creature's speed becomes 0,and it can't benefit from any bonus to its speed.
- The condition ends if the grappler is incapacitated (see the condition).
- The condition also ends if an effect removes the grappled creature from the reach of the grappler or grappling effect, such as when a creature is hurled away by the thunderwave spell. (PHB p.290)
There's no mention of the grappler losing all free hands, shrinking, or otherwise failing to satisfy grappling's initial requirements. There is a mention of an incapacitated grappler automatically ending a grapple, but "Incapacitated" is a much more severe status than not having use of a free hand. I have some thoughts on what this means when I read between the lines-- but these are game mechanics; if I'm reading between the lines to be able to obey them, I'm probably not providing a true RAW interpretation.
Going back to the paladin grappling an orc at the beginning, my best guess is that he can use his two-handed weapon without any problem, even though it means he can't start a new grapple until he releases the weapon with one hand. He can also be polymorphed into a mouse and maintain the grapple, even though he won't be able to initiate a new grapple due to size restrictions.