Hi Jon,
You typecast from LVObject to LVObject, so I'd expect that you don't get an error for that with "To More Specific Class" prim. I suspect there would be a significant increase in overhead if this primitive were to dynamically check for the class hierarchy when it's fed with LVObject. It seems to me that this is like a using the code below:
<a href="http://content.screencast.com/users/normandinf/folders/Jing/media/7a120e9c-2ed5-448a-973c-9971c69993b2/class%20typecast.png"><img'>http://content.screencast.com/users/normandinf/folders/Jing/media/7a120e9c-2ed5-448a-973c-9971c69993b2/class%20typecast.png"><img class="embeddedObject" src="http://content.screencast.com/users/normandinf/folders/Jing/media/7a120e9c-2ed5-448a-973c-9971c69993b2/class%20typecast.png" width="452" height="249" border="0" /></a>
While the other case is clearly wrong as expected.
In my opinion, this is not a bug in the behavior of the primitive but perhaps a bug in documentation?