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Hello Sara,
We tested another rule to make sure it was global, and it didn't work either. Only the Product Fields and Product Custom Properties rules are working (they are the default ones to the functionality).
It would be great if all the rules we can assign through the settings would work. But I think the minimum would be the Category ones.
Thank you for submitting this request! Our team is currently reviewing the rule behavior being described for badging as it relates to the ones mentioned. We will update this ticket once we have completed this investigation.
Are there other rules which when selected behave this way or is it specific to Category?