How does Loot Share work?

To cut it short: You can get Loot Share from every single mob in the game, except from mobs in dungeons or on your private island, or bosses like the Ender Dragon or Mage Outlaw. There are a few restrictions, however some of it still is speculation.

You need to deal at least 1% of the mobs hp as damage (confirmed)

There is a maximum of 5 players that can get Loot Share from a mob kill: If more than 5 people hit it it is either decided by damage contribution or at random who get's the Loot Share (speculation).

You need to be alive and next to the mob that's killed to recieve your Loot Share (confirmed by testing).

For regular mobs you can get exactly the same drops as the person killing the mobs, at exactly the same chance - but the drops are rolled independently! This means that you can drop a rare drop when the killer didn't get anything, or the other way around.

For player summoned mobs (sea creatures, slayer bosses) the chance to drop anything from Loot Share is 5 times lower than the regular chances. For example the chance to drop a Thunder Shard from Loot Share is 20%, when it usually is 100%. Also for this kind of mob the player that summoned the mob always get's regular rewards rather than the person getting the last hit, while co-damagers can only get Loot Share.

A special thing about Loot Share is that you can even get drops you don't meet the requirements for yourself. An example are slayer drops for which your slayer level is too low to get, or being able to drop a Magma Lord Fragment without even meeting the requirements to fish up Lord Jawbus.

There are lots of Players out there who abuse the heck out of Loot Share, annoying or even harming everyone else. For that reason I'll ask you to avoid the following behavior:

1. Hit mobs once and let others do the rest of the damage

2. Kill all of a players summoned mobs without their consent

3. Blocking a players hits while trying to get Loot Share on their mob

4. If a player asks you to not Loot Share their mobs, please respect them and move on

5. And finally the last and most important thing: DONT last hit mobs with rare drops!

The reason for that last point is, that the last hitters Magic Find applies, not the players that summoned a mob! If you carelessly last hit that mob, you're removing the opportunity for that player to swap to Magic Find gear and get better rewards. If they do that they not only increase their own chances to get drops, but also yours, so no reason not to wait for them! Its also not enough to just wait until they have their magic find gear out, they need to be the ones to kill the mob.

A big problem with almost all strategies is, that they can easily be grieved by bypassers, so sadly a lot of this will either require being left alone or actively hiding in some far off spot.

SLAYERS

Slayers didn't change as much. Simply boss trade with someone else in a party or a friend of yours, then you can both get drops from either of your bosses, as well as the xp. However, unlike before the person killing the boss is the one that needs Magic Find, swapping for more Magic Find while waiting for your trading partner to kill the boss won't do anything anymore.

FISHING

Fishing in the Spiders Den is a mess now, your legendary sea creatures won't even survive 5 seconds before they got killed by a lobby of giants sword users, so you won't be able to switch to a magic find set.
Fishing in Ghost lobbies is dead as well (you get warped back before you arrive at a pond), so all you can do is either accept the situation, or look for a private lobby and fish in a small group of people you know and that will wait for you or use magic find sets for your sea creatures.

For Crimson Isle fishing you can make use of Loot Share by barn fishing and regularily getting a few hits on the piled up sea creatures. If you do this with a group you all get loot from everyones sea creature. Good weapons for getting a few hits are ranged mage weapons (bonzo staff, aurora staff, yeti sword, spirit scepter) or the giants sword ability.

When getting a Thunder letting someone kill it with a Magic Find setup is the smart thing to do, while with Jawbus you're hardly gonna get the kill that way, so just spam and maybe stall a bit if one of your party died to them, since otherwise they won't get Loot Share.