In the latest update announcement, Kevin mentioned that Joko's exchange quest works correctly now. I'd like to highlight that I just tried to exchange 50 firebrand badges, and I recieved an error message saying to report the bug. When my USE tab was full, Joko was able to tell me that I need to clear up my inventory slots etc but after I cleared it up I get that error message. I don't know if this is the case for all the other badges, as the firebrand badges are the only ones I have enough to exchange for.