1. Enter a popular instance with any avatar with lots of local-only contacts (the one I was testing is avatar ID: [avtr_c701d721-8543-4f4e-a524-d34c52eb545b]. If you do use this, be sure to enter the expressions menu, enable the "Combat" setting, and choose the Guardian Sword/Shield weapon option to most easily see the contacts. That is what the pictures attached are of).
  2. Enable your debug overlay so you can see contacts (the avatar above, if you have the Guardian Sword/Shield equipped, should have a receiver on the hilt of the sword on your left hip).
  3. Swap to any other avatar (I swapped into both [avtr_afa9d203-c185-4eb1-8933-b37eb75ae711] and [avtr_3a96e532-d5bd-4925-a92b-ab55a1d0b45e], both avatars with high local-only contact counts due to a cross-interactive health system. Both were afflicted by the bug).
  4. Swap back into the avatar with lots of local-only contacts.
  5. Repeat steps 3 and 4 until you can no longer see local-only contacts.
The more people with contact-heavy avatars, the faster the bug seems to happen (a friend testing with duplicates of the avatar ID in step 1 had only 4 people in the instance and the bug happened immediately). Sometimes only some of the local contacts vanish, not all of them. Strangely all nonlocal contacts remain present. This only affects local contacts.
Rejoining the instance will return the local contacts, but only while you are in the avatar. They begin vanishing when you start swapping avatars again.
First image is alone in a home world. The second image is of the same avatar after swapping out of and then back into it while in a populated Black Cat instance.
This bug seemed to be happening in the previous build as well, but much less consistently. I was unable to reproduce it then and only encountered it a couple of times until the current build 1553.
On a personal note: My whole gimmick as a creator is touch and motion-based avatars that have high amounts of cross-interaction using lots of local contacts, so having the very backbone of my entire creation style become completely unusable after swapping avatars is infuriating, to say the least. I hope this is resolved soon.