I just noticed the smelter for my gold farm (which smelts the gold swords from zombie pigmen) wasn't working. There was fuel and gold swords in all the furnaces. I thought it might be that you can only do it with blast furnaces now so I swapped them out and still the swords wouldn't smelt.

I went into a creative copy of my world and the same thing. HOWEVER - when I took a gold sword from the creative inventory it smelted as usual. 

I went back and took all the gold swords that were drops out of the system and killed some more pigmen and once again the dropped swords didn't smelt.

I have opened a new creative world and the same thing happens - gold swords from creative menu smelt, drops do not

EDIT: armour from skeletons/zombies doesn't smelt either. So it seems drops from mobs are not working right