Eventually after about 10 minutes or so they started looting the chests, one of them even put on some ninja armor. By increasing the number of available slots, you bypass this problem at least for a while, until hopefully the server un-bugs itself. First launch of your dedicated server To launch your server for the first time, we won't worry about a configuration file, as the Terraria server file has a nice multiple-step wizard to get it running quickly. Don’t worry, because this is an easy fix.