Now that the servers are down, its probably safe to explain the details. Turns out, its not related to loot all except that loot all will auto-loot and equip the thing that was causing the crash...robes. The fix for the disappearing graphics introduced a problem specifically to robes on luclin model characters that would cause the character to crash if any other PCs were around when they put it on and, in turn, would cause those other PCs to crash as well.
Rashere