Would it be possible to remove containers from suffering
from chromatic flames upon death? For example the Cloak
of Wizardry may disappear upon death along with all its
contents.

If this is not possible, maybe have it so that the contents
are scattered on the ground at the corpse?

The contents of a container that is "engulfed in chromatic flame" should end up in the character's corpse and not merely disappear. If that wasn't the case for you, please bug board it.

This is not how the hoarding code works. Your cloak of wizardry and its contents are fair game if you simply don't play enough.

EDIT: Spelling.

nt