It's not that Other people pick it up, when I dropped a merc helm in that ally you said, it disappeared .
Like the glitch where you can drop a gold ore inside the mining rock in oja, exept it hides inside the building or something. I recomend you just dont drop things, and if you must, do it in an open area.   

You see, hwen I dropped to load of items in the area, only1 of them dissapeared too