One of the core concepts of the equipment design in Fractured, seems to be that it WILL break. Period. Nothing is permanent.
This is done to make sure that the player driven economy has a need for a constant influx of new equipments and that it isn't possible for the economy to "saturate".
This currently works quite fine in PvE, where the durability of items decrease at an acceptable rate and requires a constant refresh of the equipment.
In PvP though, Fractured has the same issue of many other games of its kind. Since the equipment loses durability based on the amounts of times it is used (hit/being hit), in PvP the durability goes down really slowly, since you are exchanging a lot less blows than in PvE. High grade equipments will likely be used only for PvP, not surely to hunt goblin heads, and will last almost eternally. They will change hands, but they will not decay.
Equipment in PvP simply does not phase out.
This could technically be fixed by changing the durability degrade to be based on some other factor, but it would require too much work. Instead, I think that the new pvp loot system provides a good way to include a bit of phasing out.
According to the roadmap, blue players lose 1 or 2 items on death, and neutral players lose 3 or 4.
What I propose is this:
If the blue players drops only one item, then another random item breaks (or suffers severe durability damage).
If a neutral player loses only 3 items, then another random item breaks.
When a Red gets killed, one item has a chance to break.
In this way, a blue player killed will always "lose" 2 items. Be it because they dropped them or because one was looted and one broke.
Same for the neutral player. He will always "lose" 4 items. Either 4 dropped or 3 dropped and one broken.
Red players already lose everything on death. It doesn't really matter if one the items actually breaks.
This should provide a certain quota of items phasing out during pvp activities.
Note: We are talking about KILLS, not Knock Outs.