Yes, Team Fortress 2 players recently did a big trade involving an IRL dog and, no, they're not monsters and it's quite above-board and sweet actually

pcgamer.com:

You know how sometimes you read an online post, in this case a semi-viral tweet relating to a Team Fortress 2 trade, think «hell no that didn't happen», then read it again? I've seen some corkers in my time but get a load of this:

«Allegedly a TF2 trade occurred that included a family dog as part of the trade,» says X user SirDapper. «The LIVING dog was valued at 450 keys, about $740. They traded their 'best friend of 10 years' away for some burning pixels. You cannot make this stuff up.»

First of all, it's true. Second of all, the above is something of a misrepresentation of what went on here (and now subject to a community note adding context), though there's also a wider muddying of the waters around what seems like an incredible and possibly inappropriate trade. Just on the face of it, I think many peoples' instant reaction to the thought of any living animal being part of a videogame item trade would be negative.

So what actually went down? The trade took place between OZest and Gummy, who both go by other handles but for this story we'll stick to those. And the reason it landed badly with some, initially at least, is that the news of the trade was published with some chat logs of the pair discussing the trade (which contains a whole bunch of TF2 items as well as the dog). You can see the full chats here (page 1, page 2), and I'll give three examples of their exchanges:

OZest: I can offer you 5450 keys

Or if you want, I can sub out 50 keys for a hamster.

So 5400+hamster? Does that beat your best offer?

Gummy: hmmm other than the hamster + 5400 keys or 5450 keys do you have any other pets you could offer?

[OZest mentions the dog, talks about its breed and age]

Gummy: nvm now u got me interested. How much for that dog?

Gummy: Max I can value your dog is 300 keys.

OZest: WHAT ARE YOU ON BRO

THOSE ARE PIXELS DAWG IM TALKING ABOUT MY IRL DOG

Gummy: eh IDK man a unique sidekick would cost me 16 ref

OZest: Fine even if you don't take the dog at 500