Interesting indeed.
Move the GPU with that error to a different slot with different cables, and see what GPU has the error. If the GPU you moved has the error again, I would assume it could be failing, it's the luck of the silicon lottery..
Sorry for the late reply. I tried to disable GPU 12 and the miner works with GPUs 1-11. Then I tried to disable GPU9 and re-enable GPU 12 and the miner also works with GPU12 now working and GPU9 idle. I swapped the cards a bit too just to rule out hardware.
It appears only 11 GPUs can run at any given time. So this confirms it is not a GPU hardware problem.
I raised the VRAM to min 40GB and max 56GB and all 12 GPUs were humming along just fine. Thank you PhoenixMiner devs for the tip.