It fixed itself in the next turn or so, I don't remember exactly. And I could settle there / cast lower land there that same turn.
It's not a problem for me, and probably not for most of the people who've been with the beta for months. But with the game releasing in a week, a new player is going to have just killed an elemental lord for the first time (definitely a WOW moment in this game) and immediately encounter a bug. It'll kill the buzz.