Okay... After spending an hour and a half or so doing a bunch of testing in the lab and also 2 players vs, I think I've found clues to understand better how this bug works and when it happens and how you can make it happen. Let's quickly sum it up from what I mention before.
After breaking Zas' guard around 3 or 4 times, the next time I started to rise up his Guard Damage Percentage, the life bar was not flashing yellow nor red. I assumed either Percentage stopped working or the attack was causing less damage. Guard Damage Percentage was still raising despite the life bar was not flashing. Life bar not flashing but Zas' Guard Damage Percentage was still raising and eventually broke. Also at some point when I broke his guard a few times, I noticed the life bar was flashing yellow instead of fully resetting. Was it because the attack was stronger? No. No matter how strong your final attack is before the Guard Crush, Guard Crush Percentage will always reset to 0% and start anew. So what caused it to reset to 0% but it was instead flashing yellow? We'll get to that in a moment but right now I wanted to point out it was possible to crush Zas' guard with Grøh's 66A+B attack with a yellow flashing life bar. Is it possible for such a thing? I wouldn't really know if it is possible with some characters and their attacks but I happened to do it with Grøh's 66A+B. I think that covers this part for now. On to the next test (This was done in a 2player vs match offline before I headed into the lab)
Preforming the same test again but this time Kilik against Yoshimitsu. It happened again with Kilik's 5A+B Guard Break attack. It took 5 hits to get Yoshimitsu's life to flash yellow and one more for red. 7 attacks with Kilik's 5A+B broke Yoshimitsu's guard. However at some point it took less hits to reach flashing yellow and also, life bar didn't flash at all once percentage reach 90%. Also at some point I broke his guard and instead of going back to normal it was already flashing yellow during this test. Now I noticed something during this test too and I will point it out once we sum it all up in a nutshell. (Also done in 2player vs offline)
So after those two tests, I went and headed to the lab to see if I can preform this again with the Guard Crush Percentage on screen to screen cap it.
Thankfully I was able to do so. You'll find 2 screenshots above this post. So blah blah I was able to repeat what I just did before in 2player vs mode in training mode but is still unclear to me how to actually trigger this bug as much as I would like.
Anyway onto the last bit. In the two screenshots I posted above, you can see that Zas' life bar is flashing red but Guard Crush is at 0%. This is false. His guard won't be crushed with your next guard break attack. What I don't know is if it will either REALLY reset or will it be yellow. This was more a 50-50 chance for it to happen. In the second screenshot, you can see Zas' Guard Crush is at 96% and life bar isn't flashing red when clearly it should. A UI error to be sure!
Okay let's move onto the "What caused it to reset to 0% but instead it was flashing yellow after a Guard Break?" part.
This is simple to understand but the true cause of this bug is a little though to pin-point but I will tell in details in case you want to test it yourself.
So how do you get your opponent's life bar to flash yellow or red after preforming a Guard Crush? This is the interesting part... it seems your own Guard Damage Percentage has something to do with this. If you want to get your opponent's life bar to flash yellow or red after preforming a Guard Crush, you would need to raise your own Guard Damage Percentage. In other words, get your own life bar to flash either red or yellow and then try to Guard Crush your opponent.
These are the possibilities that can happen when you Guard Crush your opponent while have a red or yellow flashing life bar.
Note, assume your opponent's Guard Crush Percentage is at 0% when doing this to get a clear idea:
1 - Opponent's Guard Crush Percentage may fully reset to 0% without problem.
2 - Opponent's Guard Crush Percentage may be rising but you can't tell due to his life bar isn't flashing, but you can clearly see the Guard Crush Percentage is raising in training mode as you attack.
3 - Is possible to break the opponent's Guard Crush while he has a yellow flashing life bar. I didn't mention this before, but in fact, the opponent's Guard Crush Percentage is around 80 to 99% and it isn't flashing red. Clearly a UI error, yes? When at 50% it starts flashing yellow and red when it reaches 80% and beyond.
4 - After preforming a Guard Crush on the opponent, it is possible his life bar will flash either yellow or red. Yellow appeared to happen more often and red only occurred 2 or 3 times during these tests. Once the opponent has his guard crushed, Guard Crush Percentage returns to 0% but this has proven to be false during my testing. Guard Crush Percentage showed it was at 0% but opponent's life bar was flashing red and my next Guard Break attack instantly broke his guard again. Afterwards it started flashing yellow and percentage once again was at 0%.
Reminder these 4 possibilities only worked during my testing when my own life bar was flashing red or yellow. Nothing out of the ordinary appeared to happen if your life bar was normal. Oh and another thing that I didn't mention and now is good time before you think of testing this yourself. The chances of these 4 possibilities occurring seem to be more likely if you have a filled Soul Meter. During my final tests, I tried to repeat the steps I did before but without Soul Meter and it didn't happen at all. Having either 1 or 2 maxed out Soul Meter seems to also have a important role here. Chances of the 4 possibilities were quite higher with maxed out meter. (Your meter, not the opponent's.)
Despite all these tests, I can't really control the opponent's life bar to flash red whenever I preform the Guard Crush on him. It happens at random and sometimes your Guard Break attacks seem to do at least 5% more damage to their Guard Damage Percentage. I believe whenever your own Guard Damage Percentage is high, you start to do more damage to your Opponent's Guard Damage Percentage but the number ain't always the same and is unpredictable. Can you call this a bug? Without a doubt we can call the UI and error. What are your thoughts on this? I say this should be addressed or explained in further details to understand it better.