I can confirm turning in three staves from one individual does work post-patch (grats Serous!), but we have not attempted an MQ since December. So if anything is indeed bugged, it's just the MQ.
I'll take your word for it on the faction tiers (you know your classic EQ!), though it seems like the epic can be turned in without doing any of the quest steps or any other faction work of this is true. You start out indifferent and remain indifferent throughout despite several positive faction hits during the quest.
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