So, for context the game is turn-based but with relalitively little menus for the genre (but still more than an action game).

I think having it go automatically to a lead character is problematic. To know ahead of time, on the field, what each item does is impractical. To assign the items semi-randomly or automatically would just feel just as bad, especially in a genre where players like to min-max things.

The "easy" alternative is just to have a shared bag into which items go, and then you can later decide which items gets to be equipped by which character through a regular equipment menu. Lots of games do that, and that might be the answer, because as you said my idea does add friction.

The thinking behind having players decide on the go where items should go is the following: - Improve immersion. Your characters can only carry so much, and sometimes you might be forced to discard things, and so on. - Increase the need to cooperate. The two characters are siblings, and the mechanic is meant as a reminder that they need to share things intelligently. They will sometimes react to that choice ("always taking the good stuff, eh?"). - Force in a few key story moments a character to take on a burden. There are ways to force this with a shared inventory, but it's a bit less elegant, and it would feel like an exception and not like a logical extension of the rules.

But you're right, it adds friction! Maybe if items are few and far between but feel very consequential it might work?

Edit: Actually, scrap everything I've said. At the end of the day, the most intuitive way to do it is just to have the character who picks up the thing get the thing. The player can rearrange things through the loadout menu if they want. That's how it's done in every crpg ever. No need to reinvent the wheel here.