If there was no looting there would be much more PKing, you would be still losing items,
i have found guards looting very dumb. makes no sense. they see someone get killed so they rush there looot for personal gain. wtf!
just set guards to attack for weapon in hands
this would only work if guards start to shoot without any delayimagine how many noobs would rage becouse they forget to holster their weapon on world map
Tell this to players, they do exactly the same "nonsense".
make carrying weapons in town illegal and thieves will go about totally unpunished.