I'm not sure why it happens. But I find it occurs when I try yo apply multiple flexi effects on an object. I think flexi just gets confused with certain shapes. My fix is just to place an outline effect / Bleed first. Then separate this effect so the bleed is just a shape (not grouped or connected to cut object) Then add the cut contour effect last. This workflow, for me, is a pita. So now, for simple things, like lines of text or single shapes I just draw a simple shape with the bleed color (square or rectangle behind line of text). Then add my cut contour effect last. Uses a drop more ink but saves time in the long run.
