Is OPTION (RECOMPILE) used in production environments?
OPTION(RECOMPILE) is used in real word production scenarios. I've employed it to address parameter sniffing and optimize kitchen sink queries. It might be the answer for your issue but the symptoms suggest OPTIMIZE FOR UNKNOWN (same as local variables) may address the problem as well.
I certainly would not avoid an option just because a bug once existed, and it was fixed several years ago. The main risk with OPTION(RECOMPILE) is when it's used inappropriately, such as high-frequency queries.