I already had to deal with the issue earlier today when if you use a facet you get a duplicate of an item, it gave me the exotic sparrow shell with the facet i used last week leaving only the sleeper ornament left and then gave me warlock boots which were already knocked out. And now turning in my new prototype engram to Tess gave me ANOTHER of the exotic sparrow shells which was already knocked out from the facet I used at reset. So now the facet which inst supposed to give you duplicates on the knockout list list, is dropping duplicates, AND any prototype engram you turn right now ignores the knockout list and you can receive duplicated from the knockout list.
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Prototype engrams do not have duplicate protection, only the prismatic matrix. The matrix is currently bugged, but Bungie is aware and investigating.