I noticed this first on Live while running regular content; a build using Incendiary Grenade with Chemical Burn and Scorched Ground (the Pyre Patch) advs was only doing half the damage it should have with the secondary pyre patch itself, which got me curious. I hopped on the PTS, grabbed that same character, and found it was happening on the PTS as well. Removing every single piece of gear, removing every single device, retconning away all powers and using just Incendiary Grenade R1+Scorched Ground with Medusa's Gloves and nothing else, and its secondary Pyre Patch was still only doing half damage.
So! I'm not an uber-completionist so I'd have to, for example, buy a Flaming Pumpkin PVD on Live and port over again if I wanted to test that, but I still tested some other sources of secondary Pyre Patches. Specifically, I tested Pyre at R1 from the fire set and Strafing Run at R1 from the gadgeteering set. Pyre's secondary Pyre Patch dealt half-damage when Medusa Gloves were equipped. Strafing Run's secondary Pyre Patch dealt full damage when Medusa Gloves were equipped, however. Notably, Strafing Run is not tagged as a combo, but not tagged as not a combo either (I'm assuming it isn't tagged as Direct Damage at all) and its primary damage effect isn't nerfed OR buffed by Medusa Gloves. However, Incendiary Grenade and Pyre are (understandably) both counted as non-combos and nerfed by Medusa Gloves as a result.
Lastly, to be sure, I tested Flashfire, the only source (unless you count its Magic Cauldron PVD counterpart) of a primary Pyre Patch (lasts for 16 seconds and does more damage, instead of 10 seconds and lasts less.) As expected, the resulting primary Pyre Patch was not nerfed to half-damage by Medusa Gloves. Notably, Flashfire is not constituted as a Direct Damage effect, and is subject to neither the buff OR nerf of Medusa Gloves.
All in all, this led me to the conclusion: secondary Pyre Patches tied to Direct Damage powers are being counted as Direct Damage by Medusa Gloves even though they're not Direct Damage themselves, while secondary Pyre Patches (and primary Pyre Patches too) tied to what are considered to not be Direct Damage are not counted as such. The reason this stands out to me is because, just a few months ago, these secondary Pyre Patches were not being incorrectly nerfed by Medusa Gloves, while their Direct Damage sources (see: Incendiary Grenade, Pyre, etc.) were being correctly nerfed, which leads me to believe something recently broke, either in the aforementioned gear piece itself or in how the game treats Pyre Patches as secondary effects attached to other powers. Regardless of which, the bug is: secondary Pyre Patches that are tied to Direct Damage powers are now being nerfed by Medusa Gloves even though they shouldn't be, and this is easily reproducible both on Live and on the PTS with a completely blank character that has nothing but Medusa Gloves equipped, lacking all other devices and with no toggleform, slotted passive, energy unlock, etcetera to interfere.
The fact that the forums refuse to tell you how close you are to the character/post size limit until you attempt to post something that happens to be too big- and the automated spam filter will immediately completely lock you out of posting long-term if you attempt to post or edit posts too close to the character limit- is genuine agony.