A softlock is a situation in video games where the player becomes unable to progress further in the game, but the game itself remains playable. This can occur due to various reasons, such as being stuck in a location without any means to advance, often caused by bugs or design oversights. Unlike a hardlock, where the game completely freezes, a softlock allows the player to continue interacting with the game, but without the ability to move forward.
As a prime example, think of the original Gen 1 Pokémon games. You put yourself on Cinnabar Island, exhaust all trainer battles in the area that would reward money, spend all of your money, throw away all your items, release all Pokémon that could learn Fly/Surf, use the Pokémon Center on the island, then save the game.
That is by definition a softlock. The game is still technically playable, but you would never be able to leave Cinnabar and progress to the end of the game. In WoW terms: think of Hardcore mode on the Classic servers. If you died and didn’t move the dead character to a non-HC server, the game would still technically be “playable” in that state, but as you could not revive yourself, you couldn’t continue to level up and/or progress through the endgame.
Now, I wouldn’t exactly call this a softlock in the traditional sense as the game is very much playable. After all, characters can be moved off of Remix and into the main phase of Retail, and the event will eventually end. However, I can certainly see where not getting the XP buffs that would come from that item, nor any related achievements would be more than a little annoying, especially if certain things happen to be locked behind any related achievements.
To the OP: overall it just really seems like a big oversight. At the very least, make a post in the bug report forum. If others are having the same issue, they’ll almost certainly chime in, and I’d have to imagine that Blizzard would eventually become aware of the issue.