You should lose honor for that too, and get high chances for frequent bad random events. If I were a zealous crusader or member of a knighthood order, I wouldn't want to follow any commander who pulled stunts like that instead of letting my family, church, martial order, or brothers in arms benefit from my equipment.
It
is an interesting idea, though... let's expand upon it.
Perhaps the effects could partially vary by religion? Void folks would want decreased honor (so no honor change for you!). Plus, they seem like the type to readily cannibalize their comrades, at least where equipment is concerned; death is absorption back into the Void and all that. However, perhaps this has a chance of an event making you have to fight alone against a mutiny from some of your own elite troops when they try to do the same to you!
The True Path of Enlightenment should is all about your Detachment -- if you pull a stunt of greed with mere worldly goods like this, you are flying in the face of Detachment itself. However, your elites are also all about Detachment; objects have no power or meaning by themselves. So once the wielder is dead, the sword is meaningless; if the commander makes some money to help the team, that serves the common good. Looting your dead elites as an Enlightenment follower should be a double-edged sword; benefits and drawbacks, and some 50/50 chances of benign or bad events. Perhaps a few of your elites simply Detach themselves from your petty mercenary band immediately.
Followers of The Old Gods seem most likely to abide by ancient traditional customs and simply divide up all the loot among themselves without a tremendous moral crisis occurring. You as the commander are acting outside of your role, but your troops would probably accept some kind of quid pro quo. Perhaps they demand a permanent increase in wages and/or more of the loot, and a one-time percentage of your total denars.
That leaves The One and the godless heathens. These folks seem the most likely to have straightforward, down-to-earth penalties. The One is about law and order. You lose a lot of honor and religious piety, and always get a bad event for Punishment to fit the Crime. Your prior Honor is taken into account for this.
Nonbelievers don't have any moral authority granted by religion, so they should get the worst that human pettiness and greed can offer. You take the heaviest morale penalty, you have a chance for an event where you either pay off your elites or face an elite walkout if you fail an Intrigues roll, and your troops temporarily have a chance to steal something from you and desert one at a time. You loot them, they loot you back.
All of these events should be mitigated/exacerbated by your Honor and Religious Piety. High honor or piety shouldn't always help, though -- if you're highly Detached as an Enlightenment believer, that should make the effects worse, etc.
That ought to compensate for "too powerful", hmm?
