No vendor (Oswald) in Act 3 couch co-op X-Box

Couch co-op, X-Box. Started Act 3 and talked to Oswald. Continued doing some quests, and every time we return to Act 3 town we can't see Oswald anywhere when we are logged in together. If I log in alone I see him and can shop with him, but just an empty space when logged in together.

Oswald not appearing for co-op players. Please fix.

Still an issue - Oswald only appears for player 1 after disbanding the group, but he never shows up for player 2. P2 is still stuck with the hammer of kamasa on the inventory but no vendor to turn it in.