Imo, it was a good idea on paper, but in reality it kinda stinks. I never used it tbh.
So… let’s say you empty your lost loot first, before going on a farming session. Ok, empty… Slaughter shaft time. Takes me about 10-25 mins to clear (depending on VH and modifiers), pick up anything interesting (mostly nothing after 400+ hours in this game). Ok reset do another run… same thing, pick up what I need.
By that time, the lost loot is filled to the brim with leggos.
Ending session on this toon, let me move on to something else or picking another toon. Farming some boss, get a drop, but forget to pick it up or realise it too late what actually dropped. Well, you are basicly screwed.
If you don’t go empty that sucker after every session of about 30 mins, no way in hell you are getting the item you really wanted.
Also as you mentioned in your OP, this thing should only work on actual gear and not cosmetics.