To reproduce, we have two theoretical characters, john and sam:
1) John punches Sam in the head until he is knocked out
2) Sam is unconcious and waits to wake up. when he wakes up he exits teh game
3) John sees a "temporary" character of Sam. Sams character sits down then stands back up. when Sam stands back up John shoots him in the head, killing the "temporary" character.
4) Sam logs back in, but he is still alive and in the same spot he logged out in with all his gear still
5) John and Sam can now loot this dead body that has all the gear that sam had, and if they so desire they can repeat this exploit infinite times