Bound By Destiny's Elemental Damage being taken as Chaos Damage is actually ineffective.

When an enemy's abilities convert physical damage into elemental damage, the elemental damage is not converted into chaos damage.

For example, Wicker Man's Wicker Man Molten Strike.

but Font of Thunder and Watcher's Eye are working properly.

Further testing showed that Divine Flesh worked correctly.

Only Bound By Destiny would fail when encountering skill damage that converts physical damage to elemental damage.

I'm pretty sure this item used flawed code.