Lo-Fi Games

I am allied with UC.
I talked with Lord Shiro, and when he ordered me to bow for him, I declined and then he aggroed me and started attacking me.
His bodyguards ignore the aggro and don't attack me, but they keep following Lord Shiro around as if he'd still be patrolling.
If I run my mouse over the bodyguards, it's still green.
Lord Shiro, however, is aggroed towards me, and if I run my mouse over him, it turns to red. Though he tries to attack me, his attacks go right through me, deal no damage, and my character isn't even reacting to him.

After right-clicking him (while hovering red over him), my character takes a battle stance, and starts attacking back, but those attacks also go right through Lord Shiro, so now both of them are exchanging swings, but neither is dealing any damage.
Bodyguards are still ignoring the whole thing.

Ordered another character to attack as well, but same thing happens.
Then ordered for ranged attack, my character loaded the crossbow, but then just stood there doing nothing, even though there was enough distance to fire the crossbow.

Then, while hovering red, I right-hold and I'm able to choose "talk to" again, which I do, and conversation seems normal.
I choose "punch in the face", at which instance I lose my alliance with UC, and now the bodyguards also aggro me and sword swings start to connect.

Yes I've had this bug mostly with slaves, breaking shackles of slaves who were in enemy faction and someone in my party will eventually start to attack them but do no damage.
I've also seen the same issue you had with both the nobles and the hooded guards where they are aggro'd but not enemy . Most recent time it was because I had freed one of the samuri from slave cage and the entire group became friendly but were also angry with me for attacking slavers and freeing slaves from shackles so they were attacking and my group was fighting back but no one was doing any damage.