Now that's odd- the event iterates through all its lines, but no state gets applied and no switch gets changed. I've never seen this happen before, and I'm not sure what could cause this, but I'll have to look into it in more detail. Maybe it has something to do with the switch machine, since that does a lot of variable-checking shenanigans.
That said, since it's a beneficial bug to the player, and doesn't break the balance in two, I'll wait to see if more instances of this bug come up. Is this the only time you've noticed this?