Evidently it only affects the quality of blues and purples from random mobs. As in:
not named enemies,
not bosses,
not mission rewards and most importantly not material chests. It looks like it doesn't reset after 100% or 200% or whatever, its just luck that you got 11/15 HEs from farming finch that one time..
Anyway quote and source is here:
The chance for a third item is from chests is 10%, unaffected by anything. The chances for the quality of material are hardcoded and do not seem to take any factor into account. 50% green, 45% blue, 5% yellow.
Scavenging is, by design and coding, not affecting material chests, at all. Scavenging affects ONLY and EXCLUSIVELY the chances for unnamed mobs to drop better shit. It does not affect ANY material crates, bosses or mission rewards. So, if you want more blues/purples from the random kills you do, equip scavenging.