By now lots of people have faced Mr. Gatling gun. I have yet to participate in a co-op session where he didn't accidentally backstep off the edge. I tried to see where the body fell in those fights, but I never noticed the host pick up anything off the body.

I finally got the chance to fight him myself and I was determined to fight him for real. We had a good little fight going and without any prompt on my part or pressure he backstepped off the edge. I was in the center of the area and he just offed himself. I was very disappointed until I looked down and saw that his drop was just on the edge of a plank down below. I picked up the Powder Keg Hunter Badge. Does this mean everyone else that had him fall off an area with no access point are just SOL or will that item drop respawn at the very top?

He fell off in my game and the item was stuck on some geometry out of reach. I jumped off the tower and died like a jackass trying to get to it. When I came back to get my souls the item teleported to the top of the tower where he would respawn. So I guess they thought of that scenario.

I have absolutely no idea, but there was a system in place in Dark Souls to make sure unique equipment was made available when lost in Firelink Shrine. Something similar might be in place here, though I haven't seen it myself. Could be you're out of luck at that point.

He happened to fall in a place where I could easily reach him. I think he drops a badge or something. I still don't know what badges are for.

They unlock stuff for you to buy at Hunter's Dream

The badges unlock weapons and items/equipment at the store. Probably also the Insight Shop. His badge unlocks his pile drive weapon.

If you reload the game the items should appear where he would normally be.

haha i fought him like 3 times TRYING to push him off and he wouldnt , then the one time i had him down to 10% health he jumped off himself , but the badge was easily accessible

does anyone recognize this weapon from armored core ? :)

just reload to make items appear where they should be near ledges, but [mechanics/story spoiler] there is an alter that allows you to respawn an NPC should they be killed accidentally, it requires a piece of them [skin in some cases]