Every item will have to be discarded after use unless "Do not discard" or "de-activate after use" is written.
This is correct.
I'd also like to point out in the 2nd edition, passives do not go beside your character, they stay in your hand.
Also, all "do not discard" cards were changed to "deactivate on use". THis change makes it so people can't spam "do not discard" item cards. Spamming them is a bad idea in my opinion, but you *could* do it. But you can't in the 2nd edition.