Eventually, TX confirmed on its own without the need for the bump fee.
Even if the fee is increased excessively, the same error is the there until it is changed to preserve payment.
Are you saying it's not possible to use the "decrease payment' option when bumping the fee at all?
As long as the replacement transaction is valid and meets nodes policy rules (including BIP125 requirement), the server should accept the transaction and broadcast it.
Looks like it, I tried a few times and the same error appears so it must be a bug or something because the bump fee should work irrespective of decrease fee or preserve fee as long as the fee paid is higher than the previous one right?
Let's say if I used 1sat/vb and now increasing it to 2sat/vb, I don't find any reason why it shouldn't broadcast it.