1-Up skill not working (possible weirdness with Observatory?)

On a 2T adventure, Observatory and Scouting Post buffs active.
My generals land. I wait for them to finish building their camps and then I start to move them to their attack locations. Suddenly there's a brief pause like a lag spike and then all the generals are building their camps again but in completely different locations. I wait for the new locations to finish building and set up again.

For the very first attack I sent two 1r blocks and then Champion Vargus.
The two 1r blocks hit the block camp one after another.
Vargus hits the target camp and starts fighting.
I get the notification in chat that the 1r block attacks begin, and then Vargus' attack begins. I see the dust cloud at the target camp.
I get battle mails for the 1r blocks and an intercepted mail for Vargus. There is no record of Vargus' interception in the notifications tab and I was watching the combat to make sure the blocks worked, Vargus did not go to the blocked camp.
Vargus is still fighting the target camp but loses (due to the losses from the phantom interception). At no point did Vargus leave the blocked camp and walk to the target camp.
Vargus has the 1-Up skill, so I wait for him to get back so that I can send him again. The 1-Up skill does not trigger and I have a 2hr recovery timer.

Here is the excerpt from the log. It also shows an additional attack from somewhere that never happened. I sent two 1r blocks to the same camp and then Vargus, there were no other attacks in this time.
https://i.imgur.com/xIbY6Et.png