Someone says 'Congratulations on your victory over the chimera, Kadrinath.'
Someone says 'You have earned a reward.'
Someone drops something.
Something shatters into a million pieces!
You feel much better as Milieu attendants tend to your injuries.
There is no reason why he would throw your prize on the ground.
epic 
Sad, but hilarious.
Don't be blind when you go to get your reward...
The suffering of others is a fountain of eternal joy.
cough
i mean,.. poor fellow,.. definatly a bad bug
(wish i had been at the arenas audience and seen that, wouldve made my day)
Always wait before moving north if you're dirted/blinded.
Always.
Shouldn't have to wait.
...and they drop some items in there all the time, even if you can hold it..
I believe the master will only drop in one of three scenarios. You are blind, and the mob gets the Char X cannot see it, so it drops it so you at least can get it if it doesn't break. You are holding too many items, so at least you can get it if it doesn't break. You are holding too much weight, same reason.
Three reasons he will drop it:
You are blind.
You can't hold it.
It's rotdeath.
The first two will cause it to break if it's glass. Nothing in the arena is glass AND rotdeath.