Lost Contact locations are often broken.
In my current game, I have many lost contacts displaying in positions in which I would never have seen them.
In some (maybe all) of these instances, the displayed location relative to the system center matches the relative position of the NPR's HW relative to its system center.
Presumably these ships are currently in orbit of their HW, and my contact info is updating with their current coordinates (but not their current system), even though I do not have a current contact for them, and even though my last contact with them occurred in a different system.
One possible clue:
I believe these ships were all last seen in the system adjacent to their HW.
They were on sensors in this system, near the JP to their home system, and I lost contact when I transited to their home system.
I remained in their home system for a only a few minutes, and transited back, at which point they would have been reestablished on sensors.
So, maybe there's an edge case in the code when a contact is established due to transit.
Possibly in this case the system of contact is recorded as the system that the transited ship left, rather than its current system.
And somehow, when contact is lost subsequently to that, the contact is not removed from the list of active contacts.