Was able to reproduce this with Java SDK. Can start a child workflow in a different namespace, and ParentClosePolicy does not take effect, but it does if parent and child are in the same namespace. Checking with server team now to see if we need to raise an issue.
@sp13 just checked with server team again and they informed us they are actively working on reproducing and fixing the issue, so stay tuned. Will update the github issue when more info is available.