Selling to NPCs — favorited items do not appear as selectable in the shop sell dialog.
Weapon Refining (skill) — favorited weapons are hidden from the Whitesmith Weapon Refine skill list.
Production skills — favorited items are never consumed as materials by Pharmacy, Cooking, Rune Mastery, or any other production skill.

Before this fix, the Favorite tab was only a visual organizer — items inside it could still be accidentally sold, refined, or consumed as crafting materials.

How to use: Right-click any item and select "Favorite" to move it to the Favorite tab. Right-click and un-favorite to restore full access.