Currently by default all gear you have equipped like Tools Weapons and Clothes won't drop on death and secured gear in your hotbar and equipment slots (gear you are wearing) can only be dropped if your Infamy level is above zero. Infamy is a stat bar that increases by one every time you kill someone, and slowly decreases over time back to zero. For each point of infamy you currently have, you have a chance to lose a secured item (equipped gear / weapons / tools) etc.
Hopefully this will play out in that most people will actually use their best gear all the time, and it will give a chance for new spawns who are being harassed at spawn that can’t fight back won’t lose much, while players harassing fresh spawns are putting a target on their own head, as some of their gear is now up for grabs to anyone who kills them, creating interesting skirmishes.
Farming yield of a player will be dependant on the territory they can control. If a player tries to mine the limited resources around your base, you can kill them to claim the resources back without completely ruining their day.