I did not see any mention of items being dropped down a tier in rarity.
Of 12 mystic forge attempts with 4 masterwork swords of rarity 75 or higher, I got 5 masterwork swords back, and 7 fine swords back.
I put 4 fine swords back in, got another fine sword. The last 4 fine swords I had granted me a masterwork item.
Has this how the mystic forge has always worked? Did something get bugged in the latest update?
Mystic forge is enough of a dump giving 1 item in return for taking 4 without lowing the rarity over half the time. I've not had much experience with Mystic Forge before, but from what I've read, I wasn't expecting drops in rarity.
Edited by The_Tree_Branch, 07 December 2012 - 11:50 PM.