Happens all the time for me. I finish a movie and it’s flagged as “watched” and gone from the Up next view.
Next time I start ATV it’s suddenly there again, although still flagged as watched.
If I start to play it will play from the beginning.
Yes, there doesn’t seem to be any relationship between watched status and the next up list for Movies and TV Shows.
IOW it’s not a next up list at all.
It’s been like that since it was introduced.
The only sane thing to do is to turn it off.