I'm getting confused. The original complaint was that when characters die loot appears that isn't in their inventory, whereas the change Ragnarok mentions would seem to explain the opposite, ie that loot disappears when characters die. Or is it just that the death loot breaks the connection with what the character actually was carrying, whereas if you just knock them out you get what was in their inventory, which might be better or worse than the death loot?
I confess I've never paid attention to any changes in what I get when looting knocked out versus dead characters and hadn't noticed that it was different. But I'd agree both with the OP that loot should be the same either way and with Ragnarok that this should reflect what the character was actually carrying (though I can appreciate that this would increase expectations of there being significant game consequences of killing folk and particularly merchants for their stuff).
Oh, and :moderator hat on:, let's keep the discussion friendly and constructive, and actively de-escalate tensions rather than the opposite.