The quality system is a bit odd.
To use it, first of all you have to check the “Use Item Stats” box. Then, each item has 8 types of stats (in vanilla). They all work more or less the same as far as quality is concerned.
Hadn’t tested Default Modified Value and you can’t change Randomizer Power.
Randomizer Range Override (RRO) is how many “steps” there are for every unit of “quality”, where quality is an arbitrary number assigned to an item/blueprint upon spawning. For an item of quality 5, the game rolls 5 X-sided dice (where X is the RRO). The greater the RRO, the higher the possible difference between the same “quality” items.
Randomizer Range Multiplier (RRM) is how many base values each “step” (each point of RRO) is worth. If it’s set to 1.0, then one point of RRO will be a 100% increase.
State Modified Scale (SMS) is the final multiplier applied to the stat. It is a flat number, nothing fancy here. It is generally recommended to have the product of SMS and RRM equal to 0.001 (0.1%), unless you want larger “steps”.
Initial Value Constant (IVC) is the added value of an engram crafted item (a.k.a. rating 0.00). When using percentages, 1.0 equals to 100%. So, if you set this to 1 and use percentages, a 0-quality stone pick will do 32 damage instead of 16, and if you’re using integers, it will do 17 damage. The 16 itself comes from the weapon file.
Rating Value Multiplier (RVM) is how much this stat affects Item Rating. The formula is unclear, but definitely not linear. The higher the number, the more an increase in this stat affects Item Rating.
The thing is, Item Rating is what the displayed quality of items (primitive, ramshackle, apprentice etc) is based on. It’s primitive from 0 to 1.25, then ramshackle up to 2.5 etc. Is this directly related to the usefulness of the item? Yes and no.
Item Rating itself is NOT based on the resulting stats, but rather the “arbitrary quality” of the item - in other words, the number of attempts the game makes at rolling dice for each stat - and the RVM of that stat. When the game spawns items or blueprients of some quality, the total number of dice used is randomized, as is their spread between the stats. While unlikely, it is possible for an item with lower rating to have higher stats.
Also, the Generic Quality stat (named effectiveness in-game) affects things such as food, water or torpor gain/loss from consumables (giving the displayed % of normal).
So, your problem is that your stat doesn’t affect the RVM enough, OR the RRO, RRM or SMS is too high. Alternatively, if you changed the threshold for displayed quality in PrimalGameData, that could be it.
An issue I was unable to resolve is that you can give stackable items quality, but they won’t go into different stacks based on it and instead will inherit the quality of the existing stack.