Still, unless you can check to see (or have a message pop out every time someone switches the loot mode), a person might agree to have share loot between you and him, but secretly turn it off halfway while you still show your loots to him, that would be exploitable and unfair.
Social exploitations cannot be completely stopped (eg. /dnd password scams)... giving players as much control and information is about all you can do. A notification that someone in the game has changed loot sharing options would be a good idea (to help with the situation you describe), but really if you're paying attention then you should quickly notice that you're seeing less loot.
