I'm honestly not familiar enough with estate transfers to speak intelligently. I assume, though, that the government will expect the estate to be settled and then funds are dispersed according to law. If someone that didn't have a legal right to the property took the possessions, I assume the government will collect the possessions or the value from the person. But this is based on assumptions. I have no real knowledge or experience. It might be worthwhile to ask your attorney. I don't think it's petty to ask for the possessions to be handed back or to let the person know that the estate will go through probate and they will be named for taking possessions before the estate has been settled.
You are correct... kinda. Right now we are in limbo. We have filed to open the estate and name me Personal Representative. It is sitting on someone's desk at the courthouse. Once the estate is opened, we must make public notice. Creditors then have six months to make a claim against the estate.
If no creditors come forward, then assets are distributed by the PR in accordance with our state's rules regarding inheritance. In this case, the state would require that, after creditors and the attorney are paid, everything is split evenly between my brother and me. Along the way, we can sell assets and place the funds in the estate (you have to open a bank account in the estate's name) but we legally cannot give items away - to ourselves or anybody. We could choose to hold items that we do not want to sell and even decide to give them away later, but technically, we cannot give them away until we have permission from the courts.
As to what the government would do about it... well, nothing unless either his creditors or the heirs initiate some action. If the creditors become aware that there are assets and there is more debt than funds, they could demand that the estate sell the assets to pay the debts. In this case, I would have to initiate some sort of court action, probably a replevin action, to get the items or payment of the value back from the friend.
Most of what the other friends have indicated that they want is truly junk that only has meaning to them and has no value. We could get away with giving those items away now just like we can legally call 1800 GOT JUNK to haul away the contents of the house to make it available to sell. For example, his large pile of plastic grocery bags that takes up an entire room in the house would not need to be included in an inventory. The sheets of music that he wrote that has sentimental value to friends but no monetary value, we could give away immediately.