To put the matter to rest, stopping your weapon from dropping is usually permitted in legit teams on Altimira, although not in Battle or Challenge teams. Many Battle mode rules rely on your opponents being able to take your weapon when you die, and not taking your teammates' weapons is one of the many skills a player should have when playing Challenge mode, so you should disable it in those modes. When you're not playing in a regular team, there's no harm in it, as it prevents theft and having the server eat your weapons due to random bugs. (Though as you've already seen, Sylverant is quite stable for the most part these days, and it's doubtful that any player would steal your items.)
I recommend using this for disabling weapon dropping, rather than the option in the loader:
http://psopalace.sylverant.net/download ... p_Drop.exe
With the loader, you have to exit PSO to change whether your weapon drops or not. If you leave this trainer running while you play PSO, you can enable or disable weapon dropping on the fly by pressing hot keys, so you don't need to restart the game, and you don't need to play in window mode, either.
Also, it is worth noting that none of these patches effect your Meseta. In Ver.2, your Meseta always drops when you die. Thankfully, Meseta isn't very important.
