I achieved a minimum of rank 20 in July 2014 and had have the Naxxramas cardbak unlocked but i cannot make it my favorite cardback to actually use it in-game.
Is it bugged?
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Yeah, it’s bugged. I’ve had it as my favorit for years. And suddenly after Blizzards Naxx cardback promotion you’re not able to use it as your cardback.
As far as I’ve understood The promotion is if you buy the MEGA bundle you’ll get to use the NAXX cardback. But those like you and I, who’ve attained the cardback the “right way” 
we’re not able to use it either way.