I tested the "lose everything to guards" part. All they ever took from me was the stolen items. No gear, consumables, or anything else in my inventory changed.
Edit: Test conditions. (as per the lovely poster above trying to get more info on the bug)
NA Server
Solitude, Western Skyrim
Tested both killing someone and stealing things in front of npcs.
Bounty was the standard 500g something for the killing and the stolen items were around 250g.
Tested both Kill on Sight and below that for heat levels.
For heat levels below KoS I just let the guard patrol up to me.
Tested both Resist Arrest and Pay Bounty at the guard for stealing.
I thought the same thing, if this was common or even real (??) it would definitely have more chatter about it. I took a max level character - who isn't WW, Vamp or Necro (she is an Argonian DK) and emptied everything important from her inventory, equipped some random gear, locked some of it and had random variety of items in my inventory.
IF this does happen to someone I hope they immediately report as you have suggested with all the info they can think of because it isn't a generic commonly encountered trigger for the bug it seems.
This is a known bug with UI add-ons that don’t understand when you’ve put something in your bank as opposed to losing it to a guard.
If you see something like this in your chat log, check your bank (or Inventory Insight) to see where the items actually are.
ETA: This happened to me with a DCT recipe during the Jester’s Festival 2018. It was in my bank, not confiscated. I don’t know how long the add-on bug has been around, but it’s definitely not specific to necros, wws, vamps, or the latest patch.