The text does not specify a "duration" on the gear created using the utility belt talent, and my gm argued that since it uses a destiny point, it would only last a single game session (that nearly 5 sessions after i bought the talent, though rarely used).

So, what should be the duration of something generated by the talent?

I would rule that it is available for whatever use you needed it for. When you put it away, it disappears into the belt. You shouldn't be using utility belt to pad your personal equipment list. It is there for whatever device you forgot or didn't know you needed to bring.

It's for the 'uh-ohs' when out and about. I don't know as it necessarily disappears but it's limited in what it can conjure up anyway, and if you started keeping everything we would start to apply some reasonable standards to what you can actually carry for zero enc items, and of course using it to just add grenades I would poo poo if you didn't use it.

Grenades are not "small utility item or tool" though. I do believe that all weapons are pretty much out of utility belt's...utility.

If the weapon has the Limited Ammo 1 quality it can.

There's the throwing dagger in Fly Casual as well.

Rarity no greater than 4. Both the frag grenade and the throwing knife are out (rarity 5 and 7, respectively), so that leaves bolas, stun grenades and ion grenades, I think.