indeed, wasnt it you who uploaded a video of this?
The short:
When you get an item that grants any form of life; your life % stays about the same. That is, if you have 100 out of 200 HP, then pick up an item that gives 10,000 HP; you will have 5,000 HP.
If you drop your 10,000 HP item, and use a potion to heal your 100 missing HP, then pick the 10,000 HP item up; you will remain at your full HP.
This can really help while creeping, or fighting bosses; however, you cannot use it with PvP, because under those situations, it is perfectly fine for your opponent to destroy your hard earned item.