I am hosting a LAN server with two other players. When I crash in the game, the host and any other players lose all their items. This does not happen when I disconnect, only when I crash. The other players are both on iOS 6 and they play on the iPod 4 and the iPhone 4.
Update:
The best way to confirm this would be to create a world in survival, have another device join the world to create a server, gather some items, and crash the game in some way.