So who wants to see the potential teams?

[Fawqueue]

Just restrict item loot to non-equipped gear. It'd still be annoying to lose some SoW pots or a fishbone earring, but it wouldn't diminish your ability to PvP/PvE as long as your core gear is intact and safe. Without the fear of losing those hard earned items people will be more inclined to stick around and fight than panic and avoid dying at all costs.