The "target armor" modifier is still bugged a bit, yes. It doesn't work, so HP is still the best ammo to use versus armored targets for now until a fix hits (but, the AP rounds do penetrate targets, so you have that benefit still).
No change to ammo at all in the update with no change expected until A20 at the earliest but may even be after that. As a result HP still does the most damage regardless of target. However AP despite being identical to normal ammo has the bonus of penetrating multiple targets mattering on the gun/perks used.
In other words against a single target HP is the best but against multiple targets especially if they're lined up in a kill corridor AP is king.