Tabbias can be found directly across from the library in Goldpaw and is available after finishing the skirmish that Boddly sends you to fight in The Trials of Boddly. Some cargo he was escorting was attacked by bandits and they stole everything, including his sword. Their last location was in Cloudcoil Canyon, so fast travel to the Sidewinder Gorge trip door. As soon as you regain control, the NPC you need to speak with will be to your east. He mentions that the usual merchant that passes through this area is now in Crookneck Cavern.

This is a small cave that can be found in the area with the Snaketooth Ridge trip door, so travel to that next. There is a long bridge east of Wyverns’ Den and Crookneck Cavern can be found at the end of that bridge. The merchant is inside the cavern and upon talking to him, you see that he has Tabbias’ Knapsack for sale, for 1000G. There will be a short scene after buying it, then you’ll have to do battle with some bandits. They are around level 20, so they shouldn’t provide any trouble at all. After the fight, the shady dealer will give you your money back, so return to Tabbias in Goldpaw to give him back his belongings.