That's pretty much it, drop some armor from your inventory, return to the world, the armor you dropped is not waiting for you on the floor. 3/3 attempts, looks to be 100% repro. It could be that the armor is just falling through the floor though.

Seems to be working now that I've loaded a game. Perhaps it was just when playing after initial character creation?

could be part of the many clipping issues that are being reported