After breaking a boat it doesn't drop as an item to pick up
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Correction entities drop loot is off and grayed out and won't let me turn it on because cheats are off. But mobs still drop loot
I did have an issue the other day when I booted up the same realm somehow all of the world options were turned even though I never turned them off
We're tracking this issue at REALMS-13820, so I will resolve and link this report as a duplicate.
Do you have the "Entities Drop Loot" option enabled in the world settings?