I'm not entirely sure if it was intended or not, or even if it's caused by the most recent update.
So I was just playing, like normal. Then some hounds decided to show their faces, nothing weird. I equiped my log suit and dealt with them. No problem. But then, I couldn't find my backpack on the ground anymore. it didn't burn, because I was purposely next to an activated flingo when I equipped the log suit.
Then I noticed it: the backpack was in my inventory.
Now I have played long enough (I reached 350 hours today but that's irrelevant) to know that that isn't supposed to happen. I could even put it in a chest, or even another backpack.
Now the weird thing is, it only seems to happen to that certain backpack. The other backpack I made, doesn't go in the inventory.
I don't really know how this happened. I do know however that I almost always have this certain backpack equipped, so it may have happened when I loaded up the world.
I'm not entirely sure. But I'll try to explain: Make a backpack and equip it, close the world and reload it again = Pocket Sized Backpack?
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A developer has marked this issue as fixed. This means that the issue has been addressed in the current development build and will likely be in the next update.