Yep! They're called Twisted Branches. I was just coming back to post about that because I just did that encounter for the first time with my Druid. I don't remember those dropping before. Each Wood Woad dropped one. And one of them dropped an Organic Shield, which I also think is new. Same stats as other standard shields, but much more "on brand" for a druid looks-wise, if that's important to you. And if you want a shield for those special times.

Anyway, when I cast shillelagh the 1d4 Twisted Branch does change to 1d8+3 for my druid with 17 Wisdom. But it does not apply if to the second one in your offhand, if you equip both. So you're better off keeping your Twisted Branch in your main hand and moving the Flaming Sword to your off hand. It still shows up as 3d6 Fire under the offhand attack tooltip.