You can use a blood shard as bait when the bound rod is not activated. Fishing in this way does not use up the bait.

Ok, worked out the issue was with the bait handler, the items are being registered with a wildcard oredictionary registry, while the handler is only ever checking for metadata 0. Will be fixed soon.

Odd, since if it's not activated it just calls the normal right click handler, then normal rods would bug out too.