A hotfix was applied late last night that made it so the Ectoplasmic Distiller quest item would no longer generate threat. We made this change because in patch 1.12, dropping this item applied a buff to everybody in range of the item, and since buffs generate threat by default, it could be used to trivialize the threat mechanics in many encounters. We don’t believe this was an intended effect and this was a case where the impact was extreme enough to warrant the change.
Another notable reason for the change is that this item is not a quest reward, but item used as part of the mechanics to complete a quest, which is then removed when the quest is complete. We want quest completion to be a rewarding experience, and not feel like a mistake.