This issue was caused by an older Application Insights SDK on the API sending in the messages.

As the model of the in-process functions is different than the isolated functions. Digging way deeper down in the logs, showed that whenever the parent id started with "|" the operation link turned out to be set to 00000...

So whenever there was a "|" in the parent id, the function completely jacked up the operational link.

Updating to the latest SDK on the API solves this issue.