The glitch screws up inputs with recording for whatever reason which results in the characters either doing things you didn't do in the match, or even just standing there and then the AI taking over. In a nutshell it busts your replays.
It wasn't a big issue for me as you could only record ranked/simple matches in 1.02, but it's particularly frustrating when I'm trying to gather replays for a video and every single one I record glitches out. Not to mention the glitch will become much more prevalent in 1.03 when tons of players save and want to upload their replays only to find busted wastes of space.