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Assume that you and I are fighting the same monster for whatever reason.
When we kill the monster, the loot is split randomly (gold split 50/50, then other stackables the same way, then items are split going to one instance or the other.
For the first couple of minutes, when we each open the corpse, we will ONLY see our portion of the loot. Afterwards, the corpse becomes lootable by all (following the looting rights rules).
Yes it affects all rulesets, though I'm not certain how it affects PvP looting. Whether it should or not is a topic of considerable debate. Personally, I don't think it should affect those rulesets, but that's just my opinion.