I wish I had known about this before I had to look up why my quest had not progressed. Somewhat irritated that I managed to get the 4th key only to have it disappear. I enjoy the communication in the patch 2.6.1 notes on 29 Oct 2019 -
* Black Armory (Misc)
* Fixed an issue where players could not acquire nor complete the Key Mold quest for Izanagi’s Burden
Well, they did fix that issue ;-) Can't blame 'em for that ....
Of course, you'd think they would have tested if the quest actually works and therefore believe that quest is now working as intended (maybe it is ?) and not google every quest step to make sure it doesn't delete your progress.
That being said, I have heard rumors that another fix for this quest is coming Thursday. And my guess is that progress isn't lost, it's just not processed properly. The game most likely "knows" you used the key but the quest somehow fails to detect it. I would not be surprised if the fix actually makes it so that the Box will show the locks as unlocked and you can open it or it will just auto progress to the next step when you login after the update. Just speculation of course ..... but don't lose hope just yet.