Item looting (the actual "physical" process of picking items up) is still completely down to DemonBuddy itself, and this is a known bug. It comes from DemonBuddy failing to read Diablo 3 memory sometimes and thinking you have less items in your bag than you do (or thinking they take up less slots). We are all eagerly awaiting an update to DemonBuddy that will hopefully fix these problems

If it doesn't look like they will fix it, then in the future I will work on a loot-pickup-replacer that uses my custom code for item handling, which should be more reliable... but honestly DemonBuddy fixing this themselves would be a lot better - as the memory reading problems have lots of other bad effects through the bot and mess random things up, so this is an important fix I'd like to see made officially. Note that setting an empty protected bag slot or 2 can sometimes help reduce the problem a bit, but it can still mess up even then

(I've never actually had this problem myself, but I know why/how it happens, and have seen lots of other people encounter it).