I had a different issue with Grip of Winter (not sure if WAD). I captured an enemy city, which was hit with the spell and then the enemy recaptured it. Grip of Winter was still in effect though! I would have had to retake the city again and disenchant it to get rid of it, which was like a snowball effect since I couldn't produce more troops and was pretty much game over at that point lol.
It appears to be that anything queue'd up still continues production, just prevents anything new from getting created?
Edit: whoops just noticed that this isn't LH related and a necro (although still relevant I guess). Anyway, I would guess that there are some shared symptoms, and a reason why it appears that the spell isn't working is probably that it isn't affecting queues.