More info. Loot value appears to be based on the chance that it drops (Weight) as a fraction of the total weight of available loot to lootbags. The problem is, the total weight of available loot is calculated before the bag whitelists effectively add new loot to the system.
LOOTMAP.populateGeneralMap();
LOOTMAP.setTotalListWeight();
BagHandler.populateBagLists();
By removing the dungeonChest global loot source, the total weight of available loot was effectively zero and all items ended up with the minimal loot value of 1. The system does however use items that are in the global whitelist when calculating the total list weight.
So, by adding another item to the global whitelist with a large weight, such as a stick with weight 5,000 we can get all of the lootbag items to start having value again. I haven't figured out a good item to use for this (it will become recycleable and it will give 1 loot value), or tuning for its weight... but this a way to work around the problem that also gives you control the loot value all items in the lootbags give.
S:"Item Whitelist" <
minecraft:arrow:0:1
minecraft:bow:1:1
minecraft:stick:0:5000
>