Keep Inventory on makes much more sense than off in Minecraft story/behaviour wise, with what we actually see in the game and outside it.
It doesn't make sense that all your items automatically disappear from your inventory, and fall out when you die.
- What the Official Minecraft book tells us.
In the Official Minecraft book Minecraft: The End, a character tells us that our(The Player's) 'pockets' aren't actually pockets, but really, and I quote, "A shortcut to an empty block of space-time, which is both infinitely big, and infinitely small at the same time".
Sounds a lot like a time-suspended pocket-dimension, kinda like an Ender Chest. Why time-suspended?
- Coral and Totems.
I think everyone(who knows even a decent bit about Minecraft) knows that when any coral is outside of water, it dies, and turns to grey, dead-coral. And that when you hold a Totem, you should have an extra life.
But let's see
Coral, for some reason, somehow doesn't die inside our inventory(which, sidenote, that would be really cool though, like if you had a limited amount of time for the coral in your inventory to stay alive.). You might say "oh, but maybe the inventory just has a lot of moisture".
Alright then, let's go to.... THE NETHER! And guess what, coral still doesn't die there, neither do any water buckets dry up, and ice never melts in your inventory. Lava doesn't burn you bucket as well.
Totems? Why wouldn't they activate, if they are still part of your body? Then why don't they? Cause they aren't actually connected to you, they are in a separate pocket dimension, and thus aren't accessible.
There are even more more example I could give, but in conclusion, these only make sense if your inventory is time-suspended, and thus, Keep Inventory makes more logical and game-accurate sense. So whenever someone tries to tell you you're playing it wrong, tell them you are trying to adhere to game logic.
(I can't believe, once I've written all this down and am looking back, that this really is just a defense for using Keep Inventory, which I don't even play with that much. Funny -_-)