Source: Official Forums
At BlizzCon 2018, we talked about how we plan to keep loot trading in World of Warcraft Classic. We added loot trading in Wrath of the Lich King to solve a common problem: a player could accidentally loot an item meant for another player or give it to the wrong person using Master Loot. They would then have to contact Blizzard to get the item moved to the intended recipient, which might take days. We wanted to keep loot trading in WoW Classic because the end result is the same – the correct person gets the item – and it’ll save everyone time.
But we heard your concerns about the potential for abuse of the loot trading system in parties of five. It’s possible that abusive play could take the form of a group of four players colluding to deny loot to a stranger who joined their party as a pick-up. Raid groups, being much larger, come with more understanding on the part of solo players that loot distribution can depend on the whims of the many players and raid leaders who know each other.
Taking that into consideration, we’ve decided that the two-hour loot trading system in WoW Classic will only apply to soulbound gear that drops in raids. Soulbound loot that drops in five-person content will not be tradeable at any time. What we hope to do is to strike a balance between saving players time and minimizing the potential for abuse of the system. We think this approach better addresses the concerns we’ve heard from players on the subject.
Source: Official Forums