OK,
After further tests - The issue is indeed with the MULTI-LANG settings and the TEMPLATE association for menu items ... which i've re-read a few time and cant figure out.
I've installed a clean multi-lang website, left it as-is and still same issue (i.e. None of my editing was to blame). See here
( edited - removed site public info )
U'll find the LANG-SWITHCER on footer-1 module position and can switch to to hebrew for test.