Paper on 1.21.8, plugin version 1.2.5

Picking up an animal with an inventory (donkeys, mules, or llamas that have been given a chest) allows a player to carry that animal's inventory as an item, acting as a discount shulker box. I assume this is intended behavior, however it's also possible to place these animals inside the inventories of other animals, allowing you to chain-nest inventories for functionally infinite inventory space at the price of breeding the animals in question.

This additionally raises a potential concern over how this behavior could harm servers; high volume or nested NBT data can result in 'area banning'. This isn't an issue for Paper servers, but would be for Spigot and Fabric. Wiki link
I'm not sure how much NBT information is created when picking up one of these mobs, but it feels worth bringing up as a related worry.

I've configured the plugin not to allow players to pick up donkeys, mules, or llamas, but an official solution like specifically disabling the pickup of animals with inventories or disabling the nesting behavior (what vanilla shulker boxes do) would be much better.