I recently designed a script that would spawn mobs for a player to fight. One of the things I deiced to do was equip mobs with armour using set_mob_equipment. So far, I've managed to pick up some drops from these mobs.

I think the mechanism that is causing this is vanilla's rare equipment drops. To support this, all I can really say is that the items come out well worn and my instinct suggests it's occurring with the same probability that vanilla minecraft drops items on equipped mobs

The script itself which spawns mobs is quite complex, with a lot random generation of mobs - for example, a mob has a certain chance to get each piece of armour, and each piece of armour has a probability of being leather, iron or gold. I am unable to say at the moment whether it is possible that the drops have come from mobs that don't have any armour equipped.

Here is a copy of the event I've been using with added annotations:

bind(entity_death, null, null, @event,
    # Check whether the death was inside a mobarena region (mob arena regions begin with "mobarena'". I use "'" as a separator in region names for CH scripts)
    assign(@regions, sk_regions_at(@event['location']))
    foreach(@regions, @region,
        if(equals(@region[0..8], 'mobarena\''),
            # remove drops and XP:
            modify_event('drops', array())
            modify_event('xp', 0)
            assign(@region, @region[9..])
            # Include a script for the specific region which will give mob deaths specific rules (This is not in use atm)
            try(include('specialrules/' . @region))
        )
    )
)