Currently, it is possible to drop items that are not usable by your faction. For example, stigmas that only exist for one faction can drop for the other faction: Stigmas for wrong faction can drop
This can lead to a frustrating game experience, as you can not only not use the item in question yourself, but are pretty much unable to benefit from obtaining it in any way (e.g. selling it to another player that can use it, which is impossible because cross-faction trading doesn't exist). Therefore, these drops are essentially useless and demotivating after putting in the effort to obtain them, e.g. by running instances, or getting "lucky" when random mobs drop them (but your rabbit's foot is actually a rabid bunny that kicks you in the face).
I suggest the loot tables to be adapted to account for factions, so that items obtained by players are actually usable by at least someone from their faction rather than having a chance for the main drop of an instance being degraded to vendor trash.