Sorry, i missed your reply until now!
Honestly i don't understand what happens on your game. My experience with this scenario is completely different!
On my recent PBEM game, as american my training officers didn't train line infantry to light infantry at all.
They trained milita --> Line infantry continentals (yellow facings)--> line infantry trained continentals (red facings).
You can also train riflemen --> elite riflemen
For what i recall from games played years ago, this is how it has always worked.
Gaining experience "stars" don't trigger any upgrade in units. You can have militia elements with 4 or 5 experience stars and they will never become continentals unless you train them with your leaders or use one of the EP options.
Just checked and we used the latest game version: 1.10e QF2.
We played the 1775 scenario, in case this mattered.