I can also confirm that it definitely seems to be bugged and isn't dropping for some people. I used to do the little hunts every single time I got a Corsair badge but I haven't had one drop in the Dreaming City for several months now. Just this week I've spent a good few hours there and nothing. I have heard some people say that they stop dropping if you let the 'Corsairsbane' quest expire. I think this might be what happened with me. I may have let it expire or maybe even deleted it myself because I had done it so many times that I didn't care about it anymore. A few times in recent weeks I have wondered why I no longer had the badges drop, but I wasn't really all that bothered because I no longer needed them. I just assumed they stop after certain number of 'Corsairsbane' completions. Now that these badge drops are a requirement to completing the Truth quest I hope that Bungie fix it soon.