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Standing in the streets of a village, I was going through my inventory and decided to drop an armor that I wasn't going to use and wasn't worth hauling around to sell later. An NPC walks by, looks down, and asks if he can have the armor if I'm not going to use it. I say yes, so he picks it up and puts it on. ...my jaw was literally hanging open.
I heard someone on SA who went into a crowded tavern and dropped a ton of items, people then all rushed over to it and started fighting over who got to keep what, deaths resulted.
I dropped a steel pot on the ground. This dude walks over, picks it up says "You dropped this." and hands it back to me.