General

It probably works like those ra drop pots for 'higher chance' of unique drop

[quote=RedBreloom]Does monkey spirit give extra drop? confused about what "has a chance to drop unidentified item" mean[/quote]

it means IF you monkey spirit is triggered there is an increase in drop of unidentified items such as equips.. so its just boosting equip drop

Allegedly it means there's an increased chance of getting drops with potential on them, but I have no idea if that's really true or not

Not extra drop, just exp.
It has however, a higher chance of dropping armor/weapons that are unidentified, that you can identify to see the potential on, as far as I reckon.