No bug here, just normal behavior.
For some reason the lights are getting divided up into two subgroups when they are all the same type. Each says "Binning 1" and under that one group says "Position 1" and the other "Ha"
The reason is simple: There are frames acquired with different filters. A subset has been acquired with "Position 1" and the rest with "Ha". Filter names are retrieved automatically from standard FITS header keywords. Maybe "Position 1" frames have also been acquired with an Ha filter, but the script has no way to know that because the corresponding keyword says "Position 1". Obviously both names correspond to different filters, from the script's perspective.
A quick way to "fix" this problem is by adding frames manually. Click the Add Custom button and define the parameters as necessary.
On the other hand, where do the master frames come from? Have you generated them with the BPP script? Masters generated by other applications will not work.
Warning: Invalid file name characters will be replaced with underscores in filter name: 'Position 1'
This warning can be safely ignored. It simply says that the white space character in "Position 1" will be replaced with an underscore to build output file names. For compatibility reasons and to minimize potential problems with other tools and applications, the BPP script only uses alphabetic characters 'a-z' and 'A-Z', decimal digits '0-9', plus and minus signs '+-', and underscores '_'. Admittedly, the 'Invalid' word in this warning message should be 'Some'.
it would seem that the script is unhappy with FITS keywords that have spaces in them...
Not at all. The white space is a legal character and can be used without problems (although it is discouraged for different practical reasons, especially on platforms where one can have the pleasure to use a good terminal, such as FreeBSD and Linux and, to a lesser extent, OS X).
there are old versions of the script here
Obsolete versions of scripts and tools are not supported. Use them at your own risk and please don't report anything if you have problems.