I just did a test run, and you can actually do this to every single npc. This bug is particularly potent where you are in a dialog with an npc that you KNOW will be a fight. Just follow the steps above and once the npc is dead you get all their loot.
It isn't a smart thing to kill merchants but you can still trade and buy with everyone else, even bosses who have some interesting things to sell.
Raze is the dev team aware of this or is it fixed already on the internal build?