Investigating now. There is a loot out of combat checkbox on the looting page, however if you are in area where monsters are aggressive, it may have issues.
I'm running it now, ill try go for an hour without mirror mode. (I can see you are on mirror mode, which is hard to narrow down problems)
Edit: Ran for an hour, seems fine?
Pushed an update to the looting to make it a little less weird. Will now bury bones when picked up, not when inventory is full.