On two occasions, my sword disappeared from my inventory when I was being attacked by a mob. The first time it dissappeared was when I was lobbing one of the Ghasts fireballs back in the Nether. I clicked and swung, the fireball blew up on me and the sword was gone.

The second time I think I was just getting attacked by a Zombie in an abandoned mine, and I attacked back, and the sword was gone again.

I was wearing no armour the first time and a gold chestplate the second time.

The Diamond Sword with Looting III and Sharpness IV did not break as it still had over half of its durability. It just disappeared.

I'm not using any mods.

Good luck.