Yes, that's possible - in Inventory > Inventory Settings set the Inventory Type to Individual and all combatants have their own, individual inventory.
For limiting the space, enable Space Limit and define the limit value (value type Value, value e.g. 8).
If your inventory shouldn't stack items, i.e. each item occupies one slot, set the Add Items/Weapons/Armors Type to Auto Split.
Items and equipment define how much space they occupy through the Inventory Space setting, by default it's set to 1.