That is the issue, though. Whether your target has a target selected or not is irrelevant:

(full image here)
I chose the training drone one as it had a light background that made it much easier to see the visual artifact that should not be there. The problem is that you can not see your target.
If video evidence would help, this is how it is supposed to function: https://youtu.be/tOB2L6haLyY?t=58 timestamp is 0:58 just before I first target someone. You can see how the orientation of my target changes based on where they are (and where they are facing) in relation to me.
This is how it currently functions for me: https://youtu.be/uUDNl_uDe8k?t=28 timestamp at 0:28 just before I first target someone. In this one you can see that I never get to see the target I have selected beyond the small hints visible behind the artifact at the top left of the targeting computer.
You might be able to see what I'm describing more easily that way.