After getting the Scarlet Key from the Headless Horseman encounter, (or buying it on the AH) it appears that players can re-farm it for minimal difficulty and side step the Headless Horseman Encounter entirely. Now I could be wrong, but since the Scarlet Key did not drop for me from my Pumpkin, but has for others; I would presume that the Scarlet Key is supposed to be a rare item with a low drop rate.
The issue is that unfortunately because of this loophole, those who have gotten lucky can unlock the old monastery do a quick speed run and then profit off others bad luck by repeatedly looting the key from Doan’s room (which is actually where it was in Classic). Another issue is that players can resell the Scarlet Key on the AH since it is not BoP, but simply unique and then go back for another.
Given that Scarlet Keys are selling on some servers for 700k gold at the present and can be mailed to alts (something else I was able to test). This seems potentially exploitative and damaging to the in-game economy.
I was able to acquire 3 from random toons that have not even dealt with the Horseman. I wanted to retest it a few times, primarily to see what the proc rate on this bug and how often it could be reproduced.
Seems as if Blizzard may be aware of it however, as it seems after the third key from Doan’s Chest the chest with the Key has been hotfixed out. While I will be testing further, I will not be selling any of the extra Scarlet Keys I acquired until I know if this is working as intended. Also wanted to raise the issue since no one else appears to have the gravitas to do the right thing and post the matter as a potentially game / economy breaking bug.
If this is not intended, probably the most ideal solution would be to make all iterations of the Scarlet Key BoP and remove all currently on the AH so people aren’t scammed out of their gold.
Yet on the off chance that this is working as intended, I still wanted to post something so at least I can say that I did my due diligence on the matter. In any event, since this seems to be a matter in progress, I will not be looting further keys till I see an answer and I would advise other players to do the same. Cheers.