The theory that small-denomination coins constantly return is known as "recurrency". This proverb expands that theory by claiming that even bad coins will come back. Science and Googles have now charted this claim, in a chart.
The bad penny, represented by the blue line, has been around ever since pennies were first discovered in 1790.
As can be seen, bad pennies were indeed on a constant upturn until 1940, just as the proverb insisted they would be.
However, from then until the mid 1980s they experienced a downturn and have only partially turned up again since then, and not even the combined wisdoms of Science and Googles can say why.
In conclusion then: a bad penny sometimes turns up, and sometimes down. In fact they're completely unreliable, so it's no surprise they've got a dubious reputation and people call them 'bad'. Angry internet face >:(