Loot before this patch was total bullshit as well. Had nothing to do with survival. For some reason persistence is still glitching out. I don't think they would have enforced it if they didn't think it would work. Well they were wrong.
Checked some public "official" serves. Loot is "piling" there as well. But! There is some kind of "normal" density which feels pretty good. Still its just the same shit. Only not as far gone bad as the Oldschool servers are atm.
I don't think anyone of us has seen the loot system working properly yet. But from what I have seen it will be way better then what we had before which, well was just a placeholder.