I am currently using the backpack with gravestones mod and When I died, the backpack I got from my grave was empty. Would you happen to know if this issue belongs to the backpack side of the house or grave stones?

Also using gravestone mod. (version 1.10.3 for minecraft 1.12.2)

So basically, with Drop as Block on Death set to true backpack drops on the groud as an block as it should be and your grave spawns on top of it. It doesn't look nice but works; all items from your inventory are in the grave and everything from your backpack is still in it.

However if Drop as Block on Death is set to false all the items from your inventory go to the grave, but your backpack with its content drops on the ground.