The nerf seems to be you are at entry level meaning your inventory is at the startup size. If you look you will see a overflow icon which cannot be clicked. When you zone you are returned to normal but your bags are ramsacked and out of order. This worries me muchly my main is in Agartha right now and I spent lots of mof and some aurum to expand my inventory there are many high cost talisman in the inventory that would be a huge loss. I am afraid to login now because one of my alts just got naked and nerfed in agartha though nothing seems to be missing. But that overflow icon is worrisome.
OK logged a character out and at character selection screen his faction has changed and the background looks like the default starter background (living room with couch and such)
I think everything goes in there, but since nothing you do as that level 1 not-yet-character is saved it doesn’t matter. Going to one of the hubs, although your inventory is now jumbled you should still see the item count is well above the default maximum, suggesting nothing was actually lost or saved.
I got the apartment background too, but logging back in and moving to one of the hubs and logging out and in again (and out again) returned the faction background, level, and items.
OK thank you much for the quick reply.