Colossal creatures do not drop eggs. According to Jesfa at least. There was a forum post about this yesteryear.
Lawrence Kingston Year 15 Day 54 1:59
Ellias Aubec Year 15 Day 54 1:56
The 5% chance is per bandit/creature you kill, not per squad.
Lawrence Kingston Year 15 Day 53 20:17
Thanks to both of you guys!
Jesfa Year 15 Day 53 15:53
If an NPC has 1,2 or 10 items, there's a 5% chance he'll drop ONE item.
The more things he's carrying the less likely he'll drop a specific item you're hoping he'll drop.
Per creatures, there's a 5% chance they'll drop something, and then based on their "size" there's a few different % chances that item will be an egg.
So if I kill a Rancor for example, there's a 5% chance he'll drop a trophy or egg. Then, given he's a large(?) he's got I believe a 2% chance that the item dropped, is an egg. So your odds of a Rancor Egg are like some percentage of a percent, given how strong they are.
Varlathotep Al`Jormungandr Ragnvaldansson Year 15 Day 53 13:18
I do believe it's something like 5% chance for a bandit to drop a piece of its equipment, then it's a random piece of equipment (equal chance?), but I might be wrong on the exact number.
Lawrence Kingston Year 15 Day 53 13:12
What is the success rate of a bandit squad/creature squad dropping any loot? Is there a formula for it? So far I've killed 36 Tauntauns, 12 Bandits, 4 Bears, and 2 Wampas and still nothing! Thanks for all help!
Follow up: Is it every BANDIT has a 5% chance to drop something when killed, or the squad has a 5% chance to drop something when killed?