I remember hearing this, but I haven't been able to confirm this anywhere. Does a higher artifact quality mean better positive enchantments when you use it on an anvil of krong? Does it make the negative enchantments worse too, or unaffected?
Basically, better random stats the first time the item is given random stats (either by Krong or when it's generated as a quest reward / uber chest item / ...) No, it doesn't do anything to negative krongs.
@J-Factor It's such a weird side case. (getting artifacts that don't have their artifact stats yet) Is it considered a bug by the devs, to your knowledge? It feels like a bug. "(Item) didn't get its stats yet, go Krong it just for it to work right!"