Firstly, may I suggest this video: https://www.youtube.com/watch?v=dvQsqCypHCg
Secondly, the most common reason is the off-side nav source not being in FMS as you suggested, so it's good you checked that. There's also a scenario where if one manually tunes the localizer frequency before entering the terminal area, and switches back to AUTO, then the setup may not complete successfully.
If an appropriate approach is selected and FMS is the nav source then this setup should happen at ~31nm from the destination, and that's when you'd see the "ghost needles". There could always be bugs in this process.
Maybe you could reproduce a specific occasion and record a video of the approach, FMS setup, etc.? Please also provide full flight plans.