mod version 1.0.3.

Loot pinata effect makes a mob drop multiple time it's loot.
Items on mobs do count toward that loot.

steps to reproduce:

1. get an equipment item you want to dupe (mythic item will work fine)
2. find a mob that can equip said item (zombie, skeleton etc.)
3. "give" said mob said item
4. kill said mob
5. repeat steps 2-4 until loot pinata effect triggers
6. get immence amount of select item
7. if you have a spawner of said mob, it can semi-automatically generate infinite items

proposed solutions:
simple: make pinata effect not affect equipment.
complex (if not impossible): mark items when they are picked up by mobs.

P.S. this also tends to clog inventory with items

Does this work with non-equipment items like Nether Stars? If it does, it might be a bit more problematic for servers with economies.

Realistically it probably works on everything. The best stopgap solution is probably to disable mob griefing, which disables item pickup

@Shadows-of-Fire If I may ask. Will this be fixed or at least made a config in the future?

Fixed in 5.7.3 (equipment items are omitted from pinata)

does this work for mobs with chests/inventories, such as horse or donkey?