Pillars of Eternity has a major bug that the entire community is going crazy over and there isn't much hope right now coming from Obsidian on if it will be fixed retroactively or not, although we can all rest assured the bug will be fixed in an upcoming patch and that Obsidian knows all about it. The process is simple, if you double click to equip an item and your active effects... disappear (passive bonuses, including racials). There is some argument in the community right now if it's visual or not, although by most accounts the difficulty in the game is because people well, double click to equip.

The fixes for now are as follows:

• Remake your game and use console commands to get back to where you were at.
• Deal with it.
• Party members can be dropped and readded, regaining their bonuses.

For those of you who haven't double clicked to equip, you'll want to probably keep on dragging your equipment over until a patch presents itself. Players are working on mods to fix it, but nothing yet.

If you remake, try the following console (~ to bring it up) commands:

• opencharactercreationnewcompanion 0 * - where * is the level you want it to be.
• giverplayermoney * - where * is the amount of gold you want
• addexperience * - where * is the amount of EXP to put you back to where you were

Console commands disable achievements, but GoG players shouldn't mind.

Josh Sawyer's Something Awful Account had this to say on the incident and possible fix:

Thoughts on the Bug

I think that it's hard with a game as ambitious as this to not have a bug or two in it. Community reaction is snowballing to it right now, but some of the fun of an infinity engine game is to restart and restart as much as possible. Obsidian has gotten some heck because well, this is what they're known for, but at the same time the game is so big and went through so much community testing that I don't feel too bad for this. I didn't mind restarting after about 14 hours into the game, so it's not that big of a deal for me, because I got to see a lot of cool new paths and options. That's most of the fun of a game like this.

Really though - remake and try it out, you won't be sad. There are a ton of side quests you probably missed, a lot of dialogue options you probably skipped over. Like at the start, in the first side quest mini-dungeon, you're given the option of taking the remains or not, of turning them over to the magistrate or returning them, if you do or don't return them or talk to the NPC on your way out, all of these options give a different reward, story, and dialog options with different end results.

So replaying isn't that bad of an experience, although I wish a bug fix would come sooner. Be sure to save often! If you double click to equip, you'll lose your bonuses again, but reverting to a previous save will fix it up just right.