How is loot determined in Couch co-op Xbox

So Im trying to help my GF using couch-co-op and just had some questions, how does the loot system work in this mode? if I pick something up will it also pick up something for her too?

Everybody get their own loot. So you can’t “steal” loot. Imo that system is absolute great.

It seems to drop less loot for anyone who isn’t player 1. Just my experience.