Sigh, I can't seem to get this one right. Correcting errors in post above (can no longer edit it):
1) Clean install.
2) ALT-O > IRC > [ ] Minimize query window
3) ALT-O > IRC > Show in active: [x] Away
4) ALT-O > IRC > Show in active: [ ] Whois
5) Connect to a server as Nick1
6) Open a second server window
7) Connect that new server window to the same server as Nick2
8) In the second server window: /away I'm not here...
9) From first server window: /query Nick2
10) Type something in Nick2 query window
11) Nick2's away reason does not appear in query window as expected: appears in status window instead
If the same process is repeated without step 2, the bug does not occur.