I've been hit with a clue-stick that this behaviour is 5+ years old and 
understood.

As a *CONSUMER* of DNS services, I admit to some shock.

But I won't pretend I can prove "its wrong".

so basic rules for NS now include

WHOIS defined NS must exist inside some registrar.
WHOIS defined NS cannot reside under a sub-domain not managed directly in a 
registrar

grandfathered NS labels in WHOIS more than 5 years can persist

in baliwick NS in WHOIS are now simpler

-G
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