I figured it out so here's the answer for anyone who wants to know:
If you look at your server variables table and it does not include "DisableNoDrop" (exact spelling) -- Then add it and set it's value to 1. There you go. No need to mess with any of the other settings.
You do not need to mess with any other ruleset options. Additionally, you can also add "DisableNoRent" or "DisableLore" or "DisableNoTransfer" if you so desire.
Hope this helps somebody.
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