After watching the scenes in AC where materia is used, I was under the impression that materia slots on a piece of equipment would allow materia to "diffuse in and out" of it (either infusing the equipment with magic power when merging, or going out of the equipment to recover the materia orb). Following that line of thought, I retrospectively assumed that Aerith's white materia had been diffused in the pink ribbon she's wearing - when she dies, the ribbon becomes undone and releases the materia.
Between artistic license and dealing with something "magic", I'm not sure we could apply physics concepts to how it actually works and behaves.