I think that the nasty gross distorted ghost note your talking about is Eventide's intention with the low bit depths. When i first heard that, i thought it was a bug too, because i was assuming that when i lowered the bit depth, i would get a thicker, more smeared vintage delay sound.
So i posted a complaint about that "bug" a long while back, but Eventide convinced me that that's what low bit depth vintage digital delays would sound like. Considering my lack of experience with the vintage digital delays, i believe Eventide.
However, many people here (myself included) would prefer that the x-knob provided something more musical on the vintage delay and tape delay settings rather than ugly noise, but to my knowledge, we haven't heard any plans from Eventide to change them. Nevertheless, I think Eventide has been very patient to hear this come up over and over again.
That's what i think the situation is at least.