Nope it still works. People may just be getting better at dodging them. I know that I have.
If people use the blind eye perk the drones won't see them. You just may be in matches where most of the players are using Blind Eye.
It seems to be missing all the time now or just getting a hit marker
could be that people A) hide when they hear it, B) use flak jacket more (which I have noticed in core modes). If you want to read upon what has and has not been modified go here and read: http://community.callofduty.com/thread/200545668#.UkRe2IYWJ4w
I don't think that it has been nerfed.
I do like to throw it at people like a grenade though, the WTF you get is priceless.