I don’t know if this is your problem, but I’m also having some issues with transitions in nested items that I don’t remember having had before. In my case, when I have transitions inside the nested sequence, and then I do something else to it, like apply a widescreen filter to the whole sequence (which is, in my case, the whole point of nesting it), I get banding in the transitions, even after rendering. I’m talking about normal cross-dissolves, nothing strange.
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william