When mobs spawn with items equipped, there's a low chance some of those items will drop on death. (Thus the piles of badly damaged, randomly enchanted gear a mob trap often generatres.) But most mobs can't pick up items from the ground and equip them.
The fact that some *can* pick things up isn't exactly the problem either. It's the fact that when spawning exact copies, the MFR auto-spawner duplicates even the picked up items (items which the mob didn't have when originally spawned). The copies do not need to be *that* exact -- indeed, they should not be, precisely because this can be abused to dupe arbitrary rare/expensive items.
Copying the mob itself exactly, including its ability to pick up items (if it has that), is totally fine. Copying any items that mob had picked up before capture, in such a way that the duplicated mobs drop these duplicated items on death, is entirely different.
I can imagine a couple possible ways to resolve the issue. Most simply, checking if an item was picked up and not duplicating those items along with the mob. Spawning the mob with copies of those items, but flagging them in such a way that they will not drop when the mob dies (just like most gear that mobs spawn with) would be even better, as it could be used for interesting things like generating a horde of powerfully equipped critters for a battle arena or defending a base from intruders. But in the end, while we can make suggestions, we aren't the ones who get to determine what's changed to resolve the issue.
If Minefactory Reloaded's developer ends up saying it's impossible to solve, fine, but it should still be brought to his attention if it hasn't already. And in my experience, "impossible" is a word that has trouble sticking, where Minecraft mods are concerned.
