The way it was working for me was if I cast it on a friendly target and it passed through only friendly targets then it would do no healing but would show the animation. If I cast it on an enemy target it would heal and dps any targets it passed through. If I cast it on a friendly target but it was going to pass through an enemy target it would do all healing and damage to targets that it passed.
It is a very weird bug to have come about, seemingly only doing healing if it passes at least 1 enemy target.
Another thing is that although Chi Torpedo is still only healing for around 2k it is doing damage for around 15-25k. Seems like it's maybe taking the Windwalker / Brewmaster version of the spell instead of Mistweaver.