The bug
When a wolf equips armor that has custom NBT data that data is lost. For example if you rename wolf armor using an anvil the item will lose its name when the armor is removed. This is inconsistent with other mobs like zombies that preserve the NBT of items they pickup and equip.
How to reproduce
Spawn a tamed wolf:
/execute summon wolf run data modify entity @s Owner set from entity @p UUID
Give yourself a renamed wolf armor item:
/give @s wolf_armor{display:{Name:'"Test"'}}
Equip the wolf armor on the wolf
Use shears on the wolf
→ ✔ The wolf armor is dropped
→ ❌ The wolf armor has lost its custom name
Related issues
Comments

While inconsistent with general entity equipment, this is consistent with pig/strider saddles,and a couple more cases, as covered by MC-91007.