I have been asking Penguins around the community on what were some of there first questions that they had about Club Penguin Island, so I can make posts on them to help future players know and understand more about the fun island of Club Penguin Island. The question was..
Can you still have your current items remain on you even after your Membership expires/cancelled?
The answer is No, your items will return to Your Closet, until time you’re a Membership. You may think that of course they return to it, but in Club Penguin Classic, if your Membership expired/cancelled, your Member items would remain on your Penguin until you clicked them off or changed them. So it looks like the Team decided to fix that issue for Club Penguin Island.