To determine if an item should be removed, the mod rolls a dice between 0 and 99 for every new container or NPC. If it's lower than the removal chance, the item is removed.

Now, if you increase any modifier above 1.0, your ceiling of the random removal chance increases to 120/140/...%. But the dice stays the same, from 0 to 99. With increased removal chance after modifiers, you get higher chance the dice value is going to be lower than the removal chance. See below.

Although, it works differently for item stacks, primarily ammo. They are reduced using flat scaling, for example 20 slugs * 85% - that's why default ammo modifier for NPCs is 0.3, to find more ammo on killed actors. If you increase ammo modifier above 1.0 for both world items and NPCs, you will find ammo only in owned locations, locked containers, initially dead actors and probably some other exclusions I forgot about.
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Thank you for responding so quickly! However - for example "Currency" has a default setting of 1.2 (resulting in a 102% chance of removal) and the "Food" removal default of 1.3 (110.55% as mentioned above) - would not both these settings result in the exact same result, i.e. that it would remove all such items since they both are reduced by 100%+? I have been playing with the default settings for like 1 hour just running around and looting stuff, and i have so far found both currency (caps) and food items in containers, actually in most food containers like fridge/ovens there have been quite a lot of food. So clearly it does not remove 100%+ of those items with these settings. That is why I assume I am misunderstanding something.
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I just explained how it works, you clearly did not even read my post.

110.55% removal chance means that dice rolls 1-99 are guaranteed to be lower in 10% of cases.
Yep, I completely forgot how it works:
1 - Math.pow(1 - 0.85, 1.1)
where 0.85 is the global chance, 1.1 is a modifier
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I did read it, I guess I am misreading it somehow. Maybe my english isn't good enough. The way I read (or maybe misread in this case?) is that the dice rolls , and if the number that comes up is lower than the chance then the item is removed. You wrote " 110.55% removal chance means that dice rolls 1-99 are guaranteed to be lower in 10% of cases. " - This is what confuses me I guess, because rolling a 0-99 will always be lower than 110.55, not just in 10% of the cases. But clearly since you took offense and assumed I hadn't read your comment I must misread something in the explanation. Anyway, I apologize if I said something wrong, i was just asking because I didn't understand how it worked. I will experiment myself and see if I get it! I truly appreciate the mod and your work, thank you for taking time to answer me!
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My bad, I forgot how it works myself. For modifiers higher than 1.0 there is a different formula:
(1 - Math.pow(1 - 0.85, 1.1)) * 100 = 87.59203999415325
where 0.85 is the global chance, and 1.1 is a modifier

You can test different values in the browser console (F12 -> Console)
(1 - Math.pow(1 - 0.90, 1.5)) * 100 = 96.83772233983163
(1 - Math.pow(1 - 0.50, 1.2)) * 100 = 56.472471835193794

The point is, the removal chance stays below 100% to compare it with the dice.
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Ahh, thank you so much for clearing that up!