I just had a mission I won (base defense) & I had 3 soldiers killed but some of their equipment was lost or was treated as alien booty & automatically sold if I had that checked on the buy/sell list. I couldn't really tell for sure which was the case other than what I started at the base with before the mission wasn't the same as when it was over but there was enough in the pool that I was able to buy what it looked like I lost. IE I had a soldier who was carrying a hvy needler (2 at the base before mission) got killed during the mission & after the mission I had 1 at the base but there were 5 in the buy pool so I bought back the missing one. I didn't count how many the aliens had during the mission but 4 sounds about right.
It does look as though it is that any alien weapons or weapons of soldiers killed during missions will be booty & sold if they're checked to autosell. Is this WAD or unintentional side effect? I'll keep a watch to be sure if this is the case.