I believe you are correct about bad alignment and hitting the edge of the # pallet when the hammer is aiming for SPACE. It isn’t a bad # pallet but FIGS/LTRS not lined up. 
Jerry Murphy slowed down the video even more and sent me a diagnosis earlier today. I just ran his test a minute ago and confirmed bad alignment. See attached photo. I will perform correction and see what happens. Stay tuned. 
The experience and helpfulness of greenkeyers is really great!
Cheers
Nick K4NYW 

On Sun, Mar 13, 2022 at 5:46 PM Jim Cooper <jim.w2jc@gmail.com> wrote:
On 13 Mar 2022 at 13:17, Nick England wrote:

> It's like the typebox is trying to
> shift from FIGS to LTRS, but gets
> stuck where the # pallet is
> located.......

koool video for demonstrating the typebox action !!

does it only overprint the # after a COLON followed by space  ??

I just noticed ... see the screen clip below ... the shadow
on the type pallet at the arrow is different from that of
all the other pallets around it .... is it possible that one is
a bit off alignment and getting hit by the print hammer
that is hitting the blank position next to it ?



  
--
Nick England K4NYW
www.navy-radio.com