Has the loot system been confirmed or is there any information as to what the current system being used is?

I have heard of two systems. One was that when loot drops, you will only see the loot you can use and the other is its completely random. Are any of these true or is there a different system? Perhaps one with rolling rather than the fastest click gets it?

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Q u o t e:
There is talk of making this an optional system...

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buh... WAH?