Square Enix has been quite cryptic at giving us an understanding at how Treasure Hunter really works and despite extensive player testing, we may never know the full mechanics of how it works.
However, it's not rocket science, just use children's logic: More is better!
The most accepted theory on Treasure Hunter is that each tier of TH adds a "re-roll", or another chance to obtain the item.
Example: Bounding Boots have a 7.5% drop rate. If you have TH4, you essentially have four chances to obtain a 7.5% drop (as if you killed Leaping Lizzy four times).
For Diorite, you have four chances at a 1% drop. For Boyahda Moss, you have four chances at a 40% drop. Therefore, TH makes a much more significant impact on drops that have a higher drop rate than those that don't.
TH4 would give you 5 chances or rerolls to obtain an item, not 4: the original chance that you get for just killing it, plus the 4 chances that TH4 adds.
Thieves everywhere rejoice! These can be effectively farmed now low man after the Dynamis update! Count Raum has been seen on the hill between the large amount of eyes and RDM tower, and he's really squishy :] Good luck~!
my opinion on drops is that they are determined as the mob spawns/is claimed with some variables such as TH or in abby weakness procs which are also predetermined at spawn what they will add to the loot list when you kill it
I also want to affirm that you can proc higher than TH 10 on mobs granted it is very hard to do and is only really plausible on really long fights(which SE has almost completely removed most situations with the 99 cap), I personally was able to proc TH12 on simurgh while trioing it at level 90 granted it almost enraged but its still possible
on an end note I love how people down rate dated info from comments that were posted years ago during the 75 cap times rather than down rate why doesn't the FFXIAH moderators do some spring cleaning with the old comments?
Rate down time :D
simple math 1 is less the 2, 2 less then 3 and so on. Keep it simple, more is better. As per drop % rates on other sites stop assuming those percentages weren't with TH included + Time, mob, job and silly moon phase. Fap fap fap away.
for my understanding and playing THF, TH is affect with THF having the emnity of the mob fighting, I say this because doing Nyzul or killing NM's I use the strategy of leaving the mob almost with HP and then using accomplice on who has hate, and having enough TP to try and have a last blow at the mob, has proven to be extremelly effective, on nyzul runs I always almost get the drops, Ill get 4/5-6 runs doing this, and the ones i usually dont get drop is because I fail to be the one dealing fatal blow, also I only Have TH3, my lots been suckin when comes to lot Relic Gloves.
TH+1 is reported to be a straight 1% addition to drop rates, per player testing. That is, a 5% drop rate will become 6%, a 50% drop rate 51%, and so on.
Reference: http://tinyurl.com/Divisortheory-TH-Test