Removing a shop sign from a locked chest removes the locks. I almost lost 1k nstars last night due to this.
I'm curious - was the actual chest secured by LWC, or just the sign? IIRC locking a sign prevents people from accessing the block it's connected to, but breaking the sign removes the actual locked block and thus the protection disappears.
Can confirm what @314 said. In the past had a normal chest locked only by the sign and removed the sign, causing it to be unlocked
What @314 said is correct. You need to ensure you lock the chest. Locking the sign by itself, will not protect the chest once the sign is removed.