I mean I wish I would agree but if this suggestion was to pass then the "hardcorers" among us will go ballistic about hello kities and all that.
Here's how npcs guards should react to a deadly attack in a town:They see who was killed, what he had in his inventory and go through hell to get those items. They will shoot and loot everyone who tries to touch these items, they confiscate them and when the victim comes back he can ask them to be returned.
I think that returning stuff is too much. Shooting people that loot the body before guard does should be enough to stop trolls from doing such a things, and seems to be quite easy to implement, cause it's how it works in several encounters.