I have infuse in direct mode with an emby server. If i watch anything on my ipad downloaded through infuse while offline, it keeps track of watch history until i get back home. The moment my iPad reconnects to the server, it syncs the server data back to the iPad, instead of the other way around, thus losing all watched progress.
In other words: direct mode overrides any watched status in offline mode once it reconnects. Happens every single time. It should see what watched status is ‘newer’ and thus use the iPad’s data and sync that back to the server.