I haven't logged in in a while and it appears all my pets are gone :/ is this by design?

I would definitely file a ticket so a staff member can assist you because that's not normal.

If you don't log in for a year, your pet names go up for the taking, but the pets themselves should remain intact on your account. Another user could take your pet's name, but yours would be renamed to "PetName_1234", for example. So to have them disappear completely is definitely concerning! :C