If there is a thief who has no realistic chance of ever killing you and that guy steals something from you that he can actually use, that probably shouldn't prompt a full loot.
That thief is just using his built-in class abilities to improve his own gear, the same as you when you bash someone down. The only difference is he did it without killing you
Now if a thief is constantly robbing you of stuff he can't use, and can't reasonably trade to someone else for something he *can* use, then sure. Full loot away.