Some weird things have been happening with the local multiplayer inventories, especially when copying game data to external drive to move to a new console or to back up.

When I got my Xbox series X in late December, I copied every game and save data from my original Xbox One to an external drive. I then copied the contents of the drive the the new console. While the data was being transferred to the new console, I decided to play Minecraft on the Xbox One with local split screen multiplayer. All players except for the host player were reset to spawn, with an empty inventory, which was strange because the data was only copied, not moved. I played later on the new console, and the inventories were restored.

Later, in February, an unrelated bug forced me to reinstall Minecraft. I made sure to only install the game files, not the save data, but the same happened as on the Xbox one. Today, after an update was installed, the inventories and XP levels of the players were restored to before the reinstallation. However, players were still in the same position they were in before the update.