Could it be, that you reduced the water elementals cost to 0, before you played somehow? (Like drawing it from a destroyed Baron Thulgar or something?)
Orosei and unbound evolution will “upgrade” the card from it’s cost, that is displayed on the board, not from the original card cost. So playing it on (your own!) cost reduced cards is usually not a great idea.
If the cost wasn’t reduced, then yes, this is a bug.