It's not so much a bug as a limitation in ArtRage.
Glitter is 'dry', and Oil is 'wet'. Wet media can be smeared around and mixed using the palette knife, but dry media cannot.
So for every tiny lump of paint on your canvas, we can have it either wet or dry.
When you put down a bit of glitter, it is dry. If you paint over it with the brush, at first the brush doesn't smear the glitter because the glitter is dry. But the brush is putting wet oil overtop the dry. That makes that small blob of paint wet. Next time the brush goes over it it acts like wet paint all the way down through the glitter to the canvas.
FYI colour works the same way. Make a deep pile of blue paint-tube, the airbrush a thin layer of red over the top. Smear it with the knife and it's all red - the blue has all been replaced with red.
Whatever the colour or wetness or what-have-you of the surface of the paint, that's how it is all the way through to the canvas.
Layers are a way of avoiding problems with that. If you want to keep your glitter absolutely fixed in place, put it on one layer and add another layer above it.
AndyRage's mantra for graphics engine code:
"Sure - how hard can it be?"