Brought it up with my VAR, they created a SolidWorks ticket titled "Phantom entities on offset" I believe. Problem exists in 15/16/17.
I think that is an SPR:
Fixed in:none none
OFFSET GEOMETRY IN SKETCH MODE: REMOVE ENDPOINT LOCK/RELATIONS FROM ORIGINAL TO OFFSET ENTITY
That looks correct. By ticket I probably meant SPR, I wasn't familiar with the terminology and couldn't remember what 3 letters they used to describe the action they took. Because this has been confirmed to be an issue within the software I will mark your answer as correct to bring attention to the SPR already opened for future readers. Thank you for the information.