Nilbog I can confirm that's how it's working. Easy to test with Novashine in Qeynos.
I can also confirm that people have been turning in partial rewards on purpose in at least a few cases - Hasten (ie gold & rapier) and I'd guess monk robe.
I've personally had it happen to me on part of the soulfire quest.
Basically while alive this is classic, but they're not clearing while dead. If this is a bug, then CSR should be offering some support (which they're not).
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