First of all I want to say that the change in color palette to plagued items was an absolutely superb choice. It perfectly communicates what these items are supposed to be. Very powerful, but with a significant trade off that you have to take in calculation.
I think by far the greatest issue with plagued items is they do not seem to have a place within the greater world building of no rest for the wicked. There is not one character who acknowledges the existence of these items. There is no significance, mystique, or even an explanation as to why these items exist both in world and functionally within the systems of the game.
One of the best comps to plagued items is actually in a game called Dredge. It is a fishing game in which one of the varieties of fish you can find is Abberations. These are essentially horribly mutated fish that actually mean something to the characters in the world and the worldbuilding as a whole. One of the characters even specifically requests you find them and then very creepily eats them.
Wicked needs to do something similar to this. Mayeb Roan, Filmore, or Eleanor takes particular interest in plagued items and requests more to experiment with their properties. Maybe certain NPCs will refuse to speak with you if you wield or wear plagued gear. These are just off the top of my head and I am planning on making a much more in depth video on the Coffeesnail channel in a month or two so if anyone else has any ideas of how to improve this system (not from a balancing standpoint) please feel free to do so.