devtrackers.gg
I've tested it and the duration is 6.5 seconds with both the 35% on 2h and 15% on malevolence watcher's eye, so it's either bugged and not working or it actually just increases the tickrate and does not decrease the total duration.
and tbf on GGG it does say "bleeding you inflict deals damage x% faster" it does not say "bleeding you inflict deals it's (total) damage x% faster".
edited: you're correct about your first point, i misunderstood the math.
edit2: just tested again and it's now working, getting 3.5-4.5s which can just be chalked up to counting slow or fast. The guy who worked on the wiki for the goddess scorned (same wording, except for ignite) also confirmed that it should reduce the duration.
and tbf on GGG it does say "bleeding you inflict deals damage x% faster" it does not say "bleeding you inflict deals it's (total) damage x% faster".
There is a reminder text explaining that the total damage dealt will be the same.
Multiple sources of "faster" damage application stack additively with each other, and are then applied as a single total, which is multiplicative with all other modifiers. The total percentage that the damage is faster is efectively a more multiplier on the amount of damage per second (i.e. the rate the damage is applied), and a corresponding inverse modifier on the duration such that the total damage dealt doesn't change.
So if you have modifiers totalling 100% faster damage from ignites, then your ignites will effectively have double the damage for half the duration.