Yes. I can reproduce what Philip has as well the problem while moving up
a menu item. What happens is as below.

Say the sequence after the seperator is like below with the selection on Item 3
Item 1
Item 2
Item 3

If I move Item 3 up by one then the sequence is like below with the selection 
on Item 1.
Item 1
Item 3
Item 2

Guess this is what the OP was trying to explain.

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[feisty] gnome-ui-properties / Main-Menu, issue with separator
https://bugs.launchpad.net/bugs/102527
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