Sounds like it's as intended.

Kiss of the viper: Changes the additional effect for Mug to absorb 50% of damage as HP.

Changes, not adds. So the additional effect of extra loot gets replaced by the HP drain.

As thief in 8-bit theatre says in the last panel here:



"or" not "and".

Anyway, if you're just out farming mobs why use kiss of the viper? Don't need the HP drain, and on mobs with defensive buffs it's better to start off with a stun.