Items drop but don't know up.

yea its got to get fixed.. its too hit or miss to trust it.

In absolutely the same boat here and it's not the default filter. One time switching the party loot to free for all (playing solo) revealed everything but it soon starting bugging out again. It's hiding gold items and scrolls, orb's etc. Everything regardless of quality almost all the time. Opened an abyss chest this morning and there was no visible loot at all.