Last night I decided to try the quest of the forge.  There are some spoilers here, so if you don't want to know any details about the final fight, you may want to stop reading here.

OK, so by this time I've built a relatively formidable army (including a dragon) led by my sovereign's first daughter.  It's worth noting that in one of the earlier parts of this quest I moved her alone by accident to the quest site where she was faced with a large band of darklings.  Thinking I'd really screwed up and just wanting to get it over with, I hit auto-resolve, and to my surprise she took them all down with barely a scratch.  So anyway, badass army with badass leader.

We arrive at the final battle site, the site of the Hermit and his weird group of friends.  The battle went well for us, and so for fun our glorious leader decides to go mano a mano with the Hermit.  Bad move.  She got her ass handed to her almost immediately.  Well, so go the fortunes of war.  You can't run an Empire if you're not willing to potentially sacrifice your firstborn for the cause.  Eventually she was avenged by a few well placed spells, some arrows, and a blast of dragonfire, and the battle was over.  Here's where the weirdness comes in.  She had been carrying a few pieces of the Forge with her, and when the battle was over we were left with an incomplete set and unable to finish the quest.  Apparently none of the three other surviving champions thought to pick up what she had dropped? 

So here's my question- is this a bug, an oversight, or a "feature"?  It seems to me that when a champion carrying quest items (and other unequipped items?) falls in battle, any surviving champion in the same army ought to have a chance to pick them up.  It really sucked not being able to complete the final quest on a technicality like that. (Thank God for autosaves)