Maintenance for the week of March 25:
• [COMPLETE] ESO Store and Account System for maintenance – March 28, 9:00AM EDT (13:00 UTC) - 12:00PM EDT (16:00 UTC)
Apparently it's because of an issue with the range being greater than 5m, and for whatever reason the skill no longer being considered a melee attack (By some things). Either by the poison itself or the ability not including its proc when it ticks.
The Proc from Twin Blade and Blunts Axe Bleed also functions with that ability in the same way. It can only proc from Whirling Blades and the base morph, but not steel tornado.
The more you start digging into things like this, the more it seems that every skill is hand crafted (code), which means that maintenance on them through later iterations of the game is a pain in the ass. AKA: Lotsa *** is gonna be outdated, working funky.