It was noticed that a backpack only takes 25 slots in your inventory. We messed around with nesting the 35-slot hiking backpacks. Fill a backpack, then place it inside another. You gain 10 extra slots. Fill those 10 slots, and place that backpack in another. You gain 10 more slots.

After I ended up nesting 5 backpacks, the people I was playing with noticed that whenever I joined a server, everybody nearby would stop receiving information from the server. On their screen, people stopped moving, and they became unable to pick up items or use items in their inventory. Everything just stopped.

I eventually went to a high max population server hosted by a hosting provider in hopes that the extra resources on that server would be enough to process my inventory and let me shed all my backpacks. It took around 5 minutes after I logged in before I could equip a weapon and manipulate things. It took 30+ minutes before I was able to completely un-nest all my backpacks onto the ground and empty out all the contents onto the ground (I couldn't place items from the backpack into my inventory, but I could place them on the ground). The server managed to catch up after I had done all of that.

The whole time I was doing this I had the yellow connection icon on my screen. I don't know if my actions only lagged out an area on the server, or if it affected everybody on it. We were not able to test as everybody I was playing with would log into the same vicinity as me and freeze up.