The latest Pathfinder Online developer diary has been published that focuses on inventory and looting. Included in the diary is information about encumbrance, looting and item decay. As always, it's a great look at how the game is evolving.
So now, every time you die, your threaded items lose a point of durability. Like with unthreaded item destruction, this happens whether you're resurrected or respawned. Items remain fully effective until they run out of available durability—mdash;loss of durability has no other effect on item function. Crafters can make items with bonus durability to increase the number of deaths they'll survive, although this is a tradeoff; an item that can survive more than the normal number of deaths has fewer keywords than a similar item of the same cost.
Read more on the Pathfinder Online site.