So, I was sitting at the armor shop making Leather Breasts, and the shop wasn't buying them at the time, so I gave them to my pet, Yogi (brown bear) to sit on until the shop was buying them. After loading in a full pack, I got a message saying "Their pack is full", and noticed there was no pack under him.
Just go kill your pet. Im sure something like this has happened before.
Just confirmed with Jinker that its a feature.