if my character has a full purse of gold (say 900000 @lvl90) and i click on gold on the floor, the animation for an overburdened char plays (i.e. gold flies up and down again), but the amount of gold appears to be smaller than before. does the amount of gold diminish for all people in the game or is it a visual bug that only affects the char picking up the gold?

Are you in a party? Gold picked up is shared amongst players within range when playing in a group. The amount dropping on the ground is your split that you can't store.