I play on a PVE-C server, so I think I can help with your questions.
Everything is auto locked (with no way to unlock) on a PVE server to anyone not in your clan.
Anyone in your clan can access anything owned by a clan member.
On the official PVE-C server I am on, everything is dropped on death.
there are procedures for reporting abuses and exploits of other players in the game, they can be found here- [PLEASE READ] Official servers - Terms of conduct, guidelines and procedures
I hope that helps