When I was reviewing the records of butterflies of China, there was an observation which did not have locality data, and was considered Casual, but when I viewed that person’s entire observations, the locality data is actually there!
you can just edit your observation, deleting the coordinates but leaving the place name. i did this on this observation: https://www.inaturalist.org/photos/34552773, and now that observation is casual because of missing location but still shows a place name. i don’t think this qualifies as a bug.