Well the loot systems roughly works like this:
Enemies drop random stuff from their respective drop tables, while Equipment/Item Droprate effects the amount and Luck the quality. Drops can be biased in favor of certain items in the table e.g. bosses drop their set, even to the point where the drop is guaranteed (e.g. Ganryu always seems to drop a Monohoshizao)
Drops from corpses seem to be semi-fixed. Consumables are 100% fixed and Equipment to varying degree, depending on the spot. A spot could drop any Equipment, or always a Weapon, or always a Melee Weapon, or always a Sword. Not sure if there are spots that always drop a specific items though, I think there is one that always drops Tatsuke-style Matchlocks in DLC2 Main Mission 1, WotSam. The spot in the video always drops a ranged weapon and footwear. Drop rate increase has no effect, but Luck might have… not sure tbh.
You can reroll the loot once by not taking anything and resetting the level (either pray at a shrine, die, teleport back etc.), apparently you can reset a second time by taking the item you don't want… but that didn't work for me. There are also a bunch of chests in Scion of Virtue that reset every time, as long as you don't take anything. Hard to tell if the resetting is really supposed to be that way, or if it's an exploit and the loot is supposed to be set on level entry (however all that this effectively does is add one layer of inconvenience)
Finally enemies and loot spots seem to have some sort of base quality value, means some enemies are more likely to drop high quality loot and the same is true for spots. E.g. the spot in the video will never drop anything less than divine afaik.
edit:
Guess this is worth mentioning too. At least weapon drops from enemies and loot spots seem to drop the weapons you have equipped more often. Means if you have say a Katana and Spear equipped you will find more Swords and Speards, compared to other weapons. If you change to something else, say Odachi and Axe you will start finding more of those and less Swords and Spears. Not sure about the exact details, if the chances change as soon as you switch gear, you reset at a shrine, or if this is set as soon, as you start the mission. Don't think it applies to armor, but might apply to ranged weapons (though this is hard to tell, since they are far less common to begin with)
All loot systems with randomized gear are prone to grinding, no? And I don't think Nioh is particularly bad in that regard. You can either just play normally and get what you want eventually, or you try to force your luck and opt for something more efficient, but boring…
You never have to grind to make progress and barely if you want to make a reasonable build. Only heavy min/maxing will get pretty tedious, but the game is not balanced around properly optimized builds at all… even in WotW optimized builds will kill Bosses in seconds, and if your run one of those Futsunushi Iai builds the Damage output is probably high enough to one shot bosses on the (potential) next difficulty. Grinding usually only makes sense, if you cleared all available content already and there is nothing left to do anyway. Even then it depends on what you want “I want an Grace of X Odachi” is not too bad, but “I want a Susano Karakawa armor with +500 life and inheritable”… well Good luck lol
I'm not really a fan of highly randomized loot systems, but I think it works better for this game than Dark Souls' approach, or say the Witcher 3 (where you have a bunch of randomized trash and a few fixed sets that are actually useable)
Still some design choices kinda backfired in practice… like inheritance. It's more annoying than helpful in many cases and inheriting affixes on armor pieces where they do not belong, should obviously not be a thing (and just caused balance issues), pretty sure that was an oversight, since you couldn't inherit on armor before divines, but fixing this will make people salty XD Similar issue with the “7 slot weapons” where you get 5 rolls without inheritable and thus can add a 6th modifiable stat through inheritance (and you need one fixed stat to fill all slots)
“Star affixes” also didn't work as intended I guess. The idea was probably to generate more unique loot, but in practice just made some people grind for the Unicorn piece of gear (while complaining about it). The random fixed Ethereal set bonuses are basically the same thing, though I think they will add something in the next DLC to create/modify Ethereals.
