Well, that is totally weird! I have not seen this before. It is as if you've got a Track Motion "squish" going on BUT within Pan/Crop.

If I knew any better I'd tell you. But you have me stumped. Maybe you need to reset Vegas with a Ctrl+Shift on opening Vegas. You WILL loose all your settings, but it has to be better than this?

As I said, it is as if you've been able to combine track motion INTO a P/C session. Weird!!