Remove [[:Category:Italian verb forms]] when {{temp|head|it|verb form}} is present.

That's it, really. Do you fancy it?

Why would you specify "verb form" if you don't want it to be categorised under "verb form"? That's just contradictory.

I mean literally remove the text [[Category:Italian verb forms]] and multiple consecutive line breaks when {{head|it|verb form}} is present, as the former is redundant to the latter.

Oh like that. It's possible but it's not easy to do. The problem is knowing which entries have it and which don't. The simplest way I know of would be rather invasive at least temporarily: edit Module:headword so that it does not add "Italian verb forms" and then remove the category from any that remain in Category:Italian verb forms, until it's empty, then restore Module:headword again.

It's easy to do with AWB but the list is so big it keeps crashing. And it would take about 5 days continuously to do the whole lot.

How would AWB know which entries to edit?

Load the entire category and skip if does not contain the string {{head|it|verb form. That's why the list is so big.

Yes that's what a simple Python bot would do too. But that way you don't know whether you skipped any, nor which still need to be done. My proposal would work around that, but at the cost of temporarily emptying out the category.