Is `watchdog-show string` broken in 7.56?
No. Or maybe yes - broken for all versions of Drush. The problem is that Drush only searches the message column of the watchdog table, not the variables column too. A watchdog entry is built-up by a message - format string - where a variable can be inserted. If the text you are looking for is in the variable part, Drush won't find it.

Yes, this is very annoying. There is a related Drush bug - see https://github.com/drush-ops/drush/issues/408 Maybe you should comment and ask for re-opening?