No, sadly it does work. Whatever numb nutz added the hp/mp squash didn't take into account how much people depended on those regen early game. It all comes down to increasing the max number of hp/mp of your characters for it to work. Ex. Meredith's necklace regens 5% of her max mp each round. So if her max mp is say 19 that's a whole 0.95% you are getting which is basicly 0. You need her to have at least 20 mp to get 1mp point each round which blows. You are better off just buying water and stuffing her face after each battle. The nature orb that regened 2% of your life back? Not unless you have at least 50 health buddy, then you get a crappy 1hp back per turn. Yea it suck big time, they ruined most of the gems with this.
i just went the easy route and edited my save to have like 10,000,000,000,000,000 (you get the idea) gold and bought max numbers of the hp/mp/atk/def food items, while it doesnt help with magic attack, it DID boost my hp/mp enough for regens to work again... while ALSO taking away any chance of there being ANY challenge at all (not that the enemies in 5.8b were challenging, so i guess its fine lol)
considering the muck ups discovered so far, i imagine abyss knight is ALSO still mucked, and attacks itself rather than the enemy XD