I've figured it out. Sorry for thinking it was a bug in mIRC. This was a whole new journey and learning experience for me. The bug was in the bouncer (as does make sense). The debug mode in mIRC helped me learn about the IRC protocol a bit.
For reference, the underlying issue was that the bouncer didn't properly replay the 005 messages back on a new client connection. The bouncer only held one of the 005 messages and not all of them, so mIRC didn't know about the capabilities of the server.
Thanks again for your patience.
Rich