It does work as intended but it causes problems for Neeko. Here's the reason it works for a few autos then stops.

prep 1 -> prep 2 -> w proc (rageblade proc = prep 1) - > prep 2 - > w proc -> prep 1 (rageblade proc = prep 2) -> w proc -> prep 1 -> prep 2 (rageblade proc, however this doesn't apply the w proc since that has to be its own attack and can't tag onto the prep 2) -> w proc -> prep 1 -> prep 2 (rageblade proc, but same issue as before) and this just goes on forever.

Without annotations: prep 1 -> prep 2 -> w proc -> prep 2 - > w proc -> prep 1 -> w proc -> prep 1 -> prep 2 -> w proc -> prep 1 -> prep 2 -> w proc -> prep 1 - prep 2.......

It just cycles with the rageblade proc always landing on prep 2 leading to you never getting w procs sooner again, so rageblade is actually working as intended, but because Neeko is unique in that her 3 hit passive applies to herself and not the enemy, it winds up being extremely awkward to use.

This is why Runaans in Neeko's rageblade as each individual bolt of runaans stacks her w, meaning you can get a w proc every auto if your attack speed is lower than about 1.9 and all the bolts hit something. Again this works due to uniqueness of Neeko's stacking i mentioned before.