Blizzard has clarified how loot will work from Heat 3 difficulty in Molten Core. The items will have no increase in power level, but there will be additional drops per Heat 3 boss and weapons will get a bonus glow effect.
SoD Molten Core Guide
This is not entirely accurate. To be very very clear, the items in Molten Core never increase in quality or power level as the heat level increases. The only difference is that weapons that drop in Molten/Heat 3 will have an extra glow effect that is cosmetic only. The stats and damage are identical and these are, for all intents, the exact same items. You will never be gated in your access to the best quality/most powerful items by not killing bosses on Heat 3.
The “additional drops” simply means that due to the increased difficulty, preparation, and time investment required for Heat 3, we’ve redistributed some (not all) loot tables slightly so that some drops that normally only come in the later parts of the raid have a small chance to also drop from some earlier bosses. There are a scant handful of items and loot tables that have been changed in this way between Blistering and Molten heat and this won’t be very impactful to your overall rate of gear acquisition between Blistering and Molten.
We felt it was important to really spell out our expectations here. We fully expect most groups to be capable of Blistering/Heat 2 and that will be where we expect the majority of groups to spend most of their time. Molten/Heat 3 is meant to be something you do “to say you did it” for the most part. The “extra” rewards such as they are are not massively significant, by design.