Microsoft accounts when online (can access Xbox servers) and the same Microsoft account with only LAN access (offline, cannot access Xbox servers) are not linked properly. This causes a LAN player to lose their entire inventory by disconnecting from the server and join back with their online Microsoft account. This connection to Microsoft overrides their previously gathered items during their LAN session, making it impossible to recover those items. It's frustrating.

This bug affects all versions that have an option to sign into Microsoft accounts. The problem is Microsoft. Period. I really hope someone at Mojang understands how to simply link local/offline and online Microsoft data in LAN worlds before Java Edition's unfortunate wide use of Micro$oft accounts.