Does anyone remember when the developers talked about if you dropped a weapon people would pick it up and try to hand it to you or sometimes they would fight over it? WTF happened to that? I was so pumped to see some bum fights over a crappy sword I dropped

I got shouted at once, for dropping a bow in a Jarls longhouse, a big burly Nord came over and threatened to kill me with it next time I did that D:

This feature is in the game. If you drop a low value item, someone will return it to you, saying "you dropped this back there". You need to drop a high value (probably enchanted) item in front of a group of NPCs to get them to "fight" over it. I have only seen this happen in Whiterun so far, however.

hmmm thats strange everytime I drop stuff people just complain about me leaving trash but never actually grab it

What jarl? I'ma test this and kill him!

I saw a group of citizens in Windhelm kneeling next to a corpse holding their hands above it like they were trying to extract its soul... does that count?