Good post, @LucanDChance, especially since it is your first !
This is behaviour we expect and I am sorry for your wife’s loss. The second death did wipe the loot from the first death. When running with another player, I usually stay with the first tombstone, making sure there is nothing that would get between them and their gear.
The alternate solution that I use while solo is replicating the gear and leaving it in a special box bear each spawn point. I can grab all and dress on the run. With legendary weapons, I get as close as possible with crafted ones, good enough.
Please help your wife through this traumatic experience !