It's caused by items (typically food) deteriorating (or at least it did a few years ago, but I thought that had been fixed). As far as I understand, you're at your maximum item limit, and then your piece of tasty snake meat loses a bit of it's quality and becomes just plain old snake meat. That seem to cause UrW to try to add the piece of plain snake meat to your inventory and find it full, resulting in it being dropped, after which the tasty piece of snake meat is removed.
There is a maximum weight characters, creatures and craft can carry, but there is also an item (stack) limit, with the PC's limit being much higher than that of other creatures and craft. Thus, when collecting the spoils after defeating robbers, give the big heavy stacks to other creatures (henchmen or animals), and take all the light stack yourself.
If you find yourself frequently hitting the item limit you're probably doing yourself a disservice, as encumbrance is a killer: it increases the rate of fatigue build up, as well as lowering your success chances with tasks outright. There are hauling situations when you carry as much as you can, but when going about your daily life you ought to carry only what you need for the immediate future. My characters drop everything carried (you need your tools [used from the ground], some food for the day, etc.) before starting tasks, and picks them up afterwards.