Game mechanics should SUPPORT lore, if not common sense.
And I don't think players are so dumb that they wouldn't look for a leathery creature when they are hoping to get Leather drops.
Game mechanic loot drops from creatures has rarely ever made much sense from either a lore or logic-view in plenty of RPGs. Elder Scrolls especially. Skeevers dropping dozens of coins plus a fork? Sure. That wolf had an axe? Why not.Giant's only have 1 lootable toe? *Shrugs*
Mudcrabs dropping leather is low on the list if you ask me.
I find RPG drop tables hilarious from a realism/lore perspective. That nude skeleton clawing at you dropped 300 gold and armor that it apparently wasn't wearing? Magic pockets. Cliff racer drops a fancy magic ring? He probably ate it. One can also assume a mudcrab dropping leather probably ate something that would provide leather, like the corpse of an unfortunate wolf, or the backpack of some unlucky adventurer.
"We're watching you, scum." ~ Every Ordinator who witnesses my social media commentary
I'm scarred for life over the fact that when you hit one of the NPC's that are carrying a box the box disappears and they run away. I mean where does it go? Mud Crab leather is now another thing I'll lose sleep over thank you.