As specified in the title, having a dropper attempt to move a shulker box from its inventory into a shulker deletes the contained shulkerbox (and all its contents). If I had to guess, I'd say that the dropper attempts to insert the contained shulkerbox into the target shulkerbox, fails (properly), and then deletes the contained shulkerbox as if it succeeded.

Changing the mod back to Fabric-api 0.37.2 fixes the issue and the shulkerbox remains in the dropper container.

Game
Minecraft Version: 1.17.1

Launcher
Fabric Launcher Version: 0.11.6

Mods
Fabric-api 0.38.0

Steps to Recreate

1. Create a new fabric server with minecraft 1.17.1 and fabric-api 0.38.0
2. Make a new Creative world.
3. Place a dropper facing into an empty shulkerbox
4. Put a button on the dropper
5. Place another shulkerbox (empty or with contents, does not matter) into the dropper's inventory
6. Activate the dropper with the button

Expected
Dropper fails to insert the contained shulkerbox into the placed shulkerbox and dropper still contains the shulkerbox.

Actual
Dropper fails to insert the contained shulkerbox into the placed shulkerbox and dropper no longer contains the shulkerbox.

@Technici4n please ping me when you have a fix for this so we can get a hotfix out ASAP, this is quite critical.

Many thanks for reporting this, I'll have a look in a bit. This is probably a consequence of #1553.

Tested and fixed, going to release a new build now. Thanks for reporting and thanks @Technici4n for the fix.