Thieves are going to steal with or without armor so nothing is going to change except force everyone else to bring losable goods. Plus "blending" in is something that works in real life, not in a game where thieves walk up to you, do FA test, thieve, then run away. No amount of blending in is going to make people not notice that.
What i blieve is the biggest unbalance with thiefs (as acually it is not a problem but a feature) is that even if you reveal them and kill them, then just come back same naked as before and continue to try to steal from you (2 min later?).
Actually I believe that is a present bug, not a designed feature. Just saying.
So what do you suggest Hertog if not to encourage pker or "raiders" to go raid other of their kind or advernturous waselanders? The whole point of a guarded city is for SECURITY. Full loot drop turned off offers precisely that. You can still die of course but the other alternative is to eliminate offensive actions all together in guarded cities.PS: Thieving itself could be re-balanced somehow but only if it doesn't hinder other things like a person ability to buy or sell from a vendor. Taking advantage of someone while they are trading really sucks and makes merchants all but useless. Even more so if there is more than one or two thieves in the area.