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First it appears that weapons don't collide with Link like the they do in the nes. they do not ignore the top half. Second the weapons aren't wide enough it seems "not wide enough meaning they'll fly right pass links head" when the correct weapon collision offset quest rule is enabled. Fixing those two issues should resolve the problems with weapon collision offset being broken i hope.
Did some tinkering just now in with Hitboxes visible and it appears that the hitboxes are the actual issue, they are always the same size "tall and narrow" regardless of direction. That allows you to pretty much dodge just about every thing when on a half tiles on the x and y axis. Except attacks moving horizontal along the row of tiles beneath you. So the weapon's hit box should be short and wide for horizontal moving weapons, tall and narrow for vertical weapons, as for diagonal weapons probably an square. Which would be the same for angular weapons.
This bug has finally been fixed.