From Jikosh:

1. Right-clicked to open the players inventory and accidently clicked (possibly right-click) to pick up armor that was directly on a player.
2. Immediately left-clicked to place armor back and left inventory.
3. Armor was gone visibly on the character, unconfirmed if the player noticed a change in the # of armor points seen on his screen.

Notes:

1. Armor was confirmed to be missing from the viewpoint of another streamer.
2. Right after said player died, the item did NOT drop from his inventory, this is evident in the video stream because he did not put it back on.
3. Player was far enough away from the edge of the map so there is no possibility the armor fell off the side.

Tested: 9/1/12 - Replicated with Jikosh

Tested with Jikosh, bug was replicated. Issue seems to be related to the fact that the ItemStacks in the InventoryView were not cloned via the Cloneable interface. Items that are removed from the InventoryView disappear from the original inventory when damage is calculated. Fix should be as simple as cloning the relevant ItemStacks.