So looks like I found what the problem is (at least I hope so). I have tried a different sequence with the same setting and this problem doesn’t occur there so I think it is the BG document I’m using that for some reason is causing it.
In the new sequence I am using a different BG Jpeg Document with the same effects but there is no issue there.
So the solution- replace the BG Jpeg layer …
Thanks for you time Walter and stay safe!