Material travelling on a conveyor that is offscreen does not transfer heat sometimes. This happens when the conveyor is diagonally offscreen to the lower left or upper right. Heat transfers properly when the conveyor is to the upper left, lower right, or directly above/below/left/right.
Load save, select the conveyor rail just before the dropper, pan to the upper right, unpause. Observe diamond on rail is unchanged at 500C. Pan down, diamond on the rails will start exchanging heat and cool down once you are directly to the right of the conveyor. Pan back to the upper right and heat exchange stops again after a few moments. Pan clockwise around the edges of the map and observe heat exchange starting and stopping.