Torch luck, and luck as a whole, is simply flawed. I posted an entire extensive rant about it on the subreddit a while back. It’s basically “Let’s make a secret mechanic, influenced by strange variables, that nobody would learn about without specific research, and can effect drop rates and the like by over 10%”. It’s simply not a system that fits with a game like Terraria, and beyond that it’s just poorly implemented.
I dropped the subject after negative torch luck was changed in 1.4.0.3, since after that I had no reason to bother with it, but I still strongly dislike the system.