Use of Items

[putrid_plum]

I think a lot of people are guilty of this, myself included, even in minor ways!  I sometimes forget I'm healing with dark evil goblin magic bones.

Bards changing into or out of armor to buff then ready for action always gives me a chuckle.

[Leaders and Followers]

I think the goblin lord talisman needs a better description if it is going to fall under this list of items. I thought I was being careful with this sort of thing, but since nothing the talisman did was inherently evil I've been wearing it with my Lawful Good Dwarf for two days as a trophy of a victory.

[Pool]

My activity has been very awful, so maybe I shouldn't comment on recent things, but this has been an issue since when I first started in the last chapter.

Somehow regular people have lost the ability to forge normal weaponry, and clergy of patrons that are either crusade-esque or neutral in nature have lost the ability to enchant their weapons. On the other hand, primitive, caveman type Orc tribes have somehow become masters at grinding stone into axe heads and have mastered enchanting within a generation, pumping out some very lethal greataxes to slash people with.

Most people've already brought up the point that clothing is just clothing and can be washed, dyed and reinforced to cover the wear-and-tear, as well as weapons can have symbols grinded off the surface or ultimately just tweaked in a cosmetic sense. I do feel though that genuine goods shouldn't be found solely off of troll corpses and danky caves, but in shops and areas frequented or maintained by said forces as well. Perhaps at prices that reflect player item listings to compete with player made and driven economy.

[Howlando]

Look, if PCs are doing low-level quests raiding goblins and other monstrous humanoids it stands to reason that they'll find that kind of gear on those quests. If they're doing machine-scavenging they'll find old Machine stuff or scrapper stuff, etc. If you raid Mudmen, you'll find strange claystuff. On EFU quests, whatever you're raiding are likely to drop their left-over gear or find their prized  treasures in their treasure-chambers.... and this is a good thing.

On the other hand, our standard generic loot drops are overwhelmingly more "neutral" and there is definitely no shortage of excellent good aligned, beautiful wondrous loot that is a core part of our module also... just it's a bit rarer and less likely to show up in a goblin's dungheap.

There is also, of course, a tremendous variety of items available for sale in the House of Trade. But reworking evil goblin items or dying blood-spattered, runic boots of the corpse-dancer is something that I think is a bit ridiculous. We try to make it so every item has a particular flair and feeling; in many cases the nature of the mechanical advantage comes from that flair, I don't think it's so ridiculous to expect players to respect that a little.

[PlayaCharacter]

Absolutely not ridiculous, and it really should be assumed that PCs know what not to wear, and told so when they don't. This is a problem on the part of players which should be addressed. All of the examples provided by OP were spot-on. But there are also gray areas here, such as items which are simply made by goblins, kobolds, or whatever, and when there is nothing else available, why not use those things? It seems perfectly in-character in this setting to me.

I'm not complaining by any stretch. I like things pretty much the way they are. But in seven years I've also never seen, say, an Ilmateri healing cloak, or a Helmite warblade. These things exist in Faerun, they are not uncommon, and I don't think it is at all unreasonable for players to make use of substitutes in the absence of these things. To the contrary, I always took that to be a way to express the "desperate survival" aspect of the setting which I enjoy so much.

The odd flavorful loot sets the tone of a setting that is literally Hell on Earth. I'm just saying, if that's what you put out there for us, and that's all we're ever likely going to get, we are in fact sometimes going to find a reason to use that goblin short sword or what have you.

EDIT: I swear I'm not trying to be a bummer here, this thread just felt like it desperately needed a counterpoint.