I have always played with Dud torpedoes but after having 4 dud eels in a row on a convoy attack I decided to try a patrol with it turned off just for fun.
Funny thing is a few torps would hit the target and detonate just like a hit, but i would get "torpedo missed" and there would be no damage. Its happened quite a few times now. Perhaps this is GWX 2.1 way of making sure people will always suffer from torpedo failures??