Since patch 1.2.0c, Heatseeker Missile doesn't take heat signatures into consideration. I know it was broken before because it was taking heat signatures from other mercenaries as well, but now it doesn't take any. Just tested it with a friend, both in full BM gear (1182 expertise), there is no difference between 5 heat signatures and 0, the damage is the same.
BW please fix it, HSM is supposed to be our main burst ability and now it's basically just an instant cast tracer. No point in playing Arsenal until it's fixed.