I have had the same probblem, I build a city and it can clone the tarth capitel of "hope".
I have allso had a Tarth cith clone my Capital "Free Hold". Saving the game and reloading it will clear the bug retuning the new city to you.
Both time I was playing a custom player kingdom faction using Tarth race. It has not happend since I starte using a difrent race for the base of my kingdom faction.