I just nearly got party wiped on my Honour-run because the vendor-dude was somehow able to not only target/see my party on the second floor above him, but he also managed to hit them with a fireball that somehow went through both floors, exploded and ignited all the smokepowder-barrels sitting up there. He hadn't moved from the ground floor, BTW, just stood right underneath my party with two floors in-between and was still able to successfully attack.
Yes, this building and also Wyrm's rock fortress, where the coronation takes place, have the same issue. Some of the walls and floor don't work as such, and I've had enemies use ranged attacks and spells through them.