Just as an update for anyone following this, Autodesk just got back with me and confirmed this is a known issue that their Development Team is looking into.
One of the many reasons to stay away from any UCS in Civil 3D. I was always told by our reseller and trainers to avoid the USC and only use DView Twist.
I wouldn't say that is a "reason" to stay away from UCS. We've been using non-WCS in AutoCAD, LDT, and C3D for years and years with no issues. This is a bug, not an inherent problem with non-WCS.
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