It doesn't spot Mystery Menu items either, although I never tried to bring 3 light swords across. Before you complete the game (you are standing outside the Observation Post or outside Phoonzangs ship) save game under a DIFFERENT name then complete the game. When you transfer to Wiz 8 you be horrified when you lose the excellent stuff. Then go back to your pre-ending savegame, Drop The Ebony Plate And Excalibur And Light Sword (stop crying) buy cheaper stuff or pick it off the piles you left in New City, complete the game again and transfer again. Except for the Elven Bow, the best items don't transfer ... the best POPULAR items don't transfer ... in massive quantities ... and when you get there, check EVERY item and see who can use/WEAR it in Wiz 8 ... prepare for pleasant surprises.
If you boost archery to 100 in Wiz 7 you can transfer 20 points to Wiz 8 (plus 5 level-ups worth of points). Pick up some good arrows in Wiz 7 and break them into small bundles and spread them among all players. Feel free to use them outside the monastery. You can get medium-quality arrows from at least 1 dealer in every town. DO NOT TRANSFER DEAD CHARACTERS. I made that mistake once and ... the problem is too complex to describe, just don't do it.
Try to transfer several Spear+2's if you can. If you find them too powerful, just sell them.