Inserting an algari gem (of any kind) into a Shoulder, Back, Chest, Hands, Legs, Feet, or Trinket slot item or a weapon/shield/offhand fails to register it for any Blasphemite bonus. These are “coincidentally” the same slots that can’t get a socket upgrade in the current retail game. The gems otherwise do work in these sockets, including the Blasphemites themselves, they just fail to count as an algari gem color for the Blasphemite effect.
Easy to reproduce. Probably “intended” in the sense that it’s coded this way on purpose (iterating through only the “socket” slots instead of all of the character’s gear). Probably “not intended” in the sense that this is not the design idea reflected in the descriptions of the items.