On Fabric 1.20.4 with Loot Bag Mod v4.0.1 (oωo-lib v0.12.3), I set my config to Whitelist with 16 entries and the loot bag to 4 drops, but occasionally when opening the loot bag it will drop another loot bag despite it not being on the whitelist (and still being on the blacklist).

Here is my full config:
https://gist.github.com/BioMasterZap/2541dd0210764e5fa93963455dbbacfa

I did try it without the duplicate entries (they are there as a pseudo-weighting system to make some drops more common than others) in case that was messing it up, but I was still able to loot bag drops from loot bags. I have been able to get drops for everything on the whitelist and double-checked to make sure all the entries were spelled correctly, so I am unsure what is causing Loot Bags to drop.

I verified this on a test profile with no other mods except the required Fabric API (v0.96.0). I think it averaged around 1 loot bag drop every 10~ loot bags opened, but sometimes they didn't show up for more than 15 bags. Except for Loot Bags, the only items dropping are the ones stated on the whitelist.