Thanks for your bug report.
Based on your 005 results, the reason for this is that the server is using the same & prefix for both channels and nicknames.
In this case, /msg sees that the parameter begins with a nickname prefix, so removes it, but then finds that the result is not a valid channel name.
I am going to remove this check in the next beta, although I believe someone may have requested this check for a reason.
That said, there are many routines in mIRC that, in some contexts, check prefixes to determine if a parameter is/is not a channel/nickname. By using the same prefix for channels and nicknames, the server has made this somewhat ambiguous.
