The way it was coded here was a temporary fix. It doesn't work exactly how it should on live, but it works enough if you know the things not to do.
The reason you didn't receive your items you gave a pet was either one of two things:
1. The NPC has a quest attached to it. The original reason it was removed on P99 was people would give Lynunga Rubies, get earrings and midnight mallets, then kill her and loot rubies. Clearly an exploit.
The way it was resolved on P99 when it was put back in game, was all NPCs that have a quest turn in associated with them, will eat any items given to them. Undead foreman in OT is a prime example. If you give him items and kill him after he will wield them but his corpse will always be empty.
2. You gave the items when the NPC was not charmed. For whatever reason the code requires the NPC be charmed when you give them the items. If for example you give the items to a non-KoS NPC like a PoMischief mob, while they are just standing there not yet charmed, they will equip all the items but will never drop them. This part isn't classic, you were able to load up rats in Freeport with items and they would drop them.
But on P99 just remember to always charm before gearing out pets.
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