As the code is right now, you cannot pick up or receive anything when you are carrying too much weight.
however, you can put things in a backpack, and pull out as many as you want (up to inventory # limit) while going over the weight limit. There IS some balance issues with this. Weak races carrying 10 gyvels on top of 3 badass weapons or w/e
I propose either fixing the code to not allow you to get anything out of a backpack if it puts you over the weight limit.
OR
Make a negative effect, like enfeeble, if you are carrying too much weigh. Cumbered by the things you carry, your feet are sore and your movement points get affected.
Thoughts?
While I agree with your reasoning, I have to ask... why does this matter? I don't see what you refer to as a balance issue as really affecting things much.
A drow carrying three awesome weapons and a shield shouldn't ALSO have 10 gyvels in his inventory to heal thru a sear blind or multiple necro blinds
It's supposed to be a drawback, not something you can workaround
edit:
Outside of the minimal PK balance reasons....it is just the principle of the mechanic. It is broken...and broken things should be fixed :-)
Again, I agree, but... how often is a drow really so close to his weight limit that this matters? I've played plenty of low str races, and I've never seen a need to be micromanaging my inventory to this level so that I can get around my weight limit, or even to prevent it from being a problem.
Weight: 310/325
That is my current character. Everything is in a WEIGHT REDUCING backpack except two weapons and a piece of armor. Obviously with my own EQ being worn
Okay... and so you've still got plenty of weight available for consumables without going over that limit, don't you? I mean, how much does a gyvel weigh?
I don't know, maybe I just don't pay as much attention to the technical details like this... it just seems like such a minor thing to me that I'm amazed you even noticed it.
Weight: 369/325 --- two weapons, one piece of armor, two backpacks and 11 gyvels in my inventory and room for another 5 items still
put all the gyvels back in the backpack....two weapons, one piece of armor, two backpacks. and ONE barrel? Weight: 328/325
Fair enough... I didn't realize gyvels weighed that much. The little things I never bother to pay attention to...
They should be changed, in my honest opinion.
A 5lb potion? lol
No wonder you spill them so much in combat... it takes both hands just to lift the thing to your mouth steadily, and a couple minutes to drink it all. 
Come on. This is a minor thing. I do not think anyone is doing this on purpose.
Low STR races are Halfling and Elf/Drow. Faeries are out cause no one plays them.
I never had any problem carring weapons with elves. Sure you cannot carry 450 of weight. But if you don't play giants it's easy. Their weapons are also light, because heavy weapon have a heavy STR requirement. The heaviest weapon I carry is normaly my single Polearm.
What I do not carry is sick *** heavy armor like titanium plate or the Ofcol armor cringe.
I'm normally 250/325 cause I do like to loot weapons I might disarm or other stuff.
Also your proposal chance is a major Nerf for all meeles and a HUGE upping to SHAMANS, NECROS.
Shamans just have to WEAKEN and spam blind. You might cure the first one, but if you are close to weight limit you will not be able to refresh gyvels from backpack.
I normally do this with DEX plague (SLOW), by decreasing the number of items in inventory. It's quite deadly.
So taking things out of your backpack allows you to carry more weight than you usually can? This is obviously a bug and should be fixed. And no Mya, this is not a minor thing at all.
I wanna see you two duke it out.
I lika do da cha cha.
Really now?
No kidding though, I like the enfeeble idea.
Shamans just have to WEAKEN and spam blind. You might cure the first one, but if you are close to weight limit you will not be able to refresh gyvels from backpack.
Awful as it is to agree with Mya this is why I see changing this as a problem.
You should be able to carry four or five. In the examples I gave I would have been able to carry three. More if I wanted to dig around in the backpack and empty out some of the useless crap I was carrying.
And if you aren't smart enough to get the others from your backpack when you use up the others....then the Shaman deserves to get the upper hand.
Hey, Anume. No hang over? Damn, I made myself marmalade in your honnor 
Weaken does not solely concern high dex races though 
weight limits grow in great leaps from 22-25 str. Weaken would gimp giants and ogres who tend to carry more items, if this change were implemented. Suddenly your ogre ranger addict can not get his leaves from his back pack. I think a change to inventory items would be better. Honestly I think 10% multiplier is absolutely ridiculous. Especially if its accessable to everyone, it makes the weight limits obsolete, and creates the glich MMA brings up. Maybe raise the multiplier to no less than 40%, the chance for abuse would be dropped by 300%. JMO
Just fix the bug and make a potion weight 1lb ffs, is it that hard?