I can't help with your main query, but we might be able to clarify your closing question about Diagram Frames. However, can you let us know what release of EA you are using?
I think your gut is correct - you are not creating (or using) Diagram Frames as designed. A Diagram Frame is a special kind of Combined Fragment that provides a picture (or just the name) and - more importantly - a hyperlink to another diagram. You create them by dragging the referred-to diagram onto your current diagram, and selecting the appropriate option (a frame with picture, a frame with name, or just the name). What are you using them to represent?
You might be able to use a Combined Fragment (which it looks like you might already be doing for the opt state section of your diagram) or a System Boundary (which is a conceptual frame around any part of the diagram you want to enclose).
I can't - at the moment - see anything wrong with your use of the Diagram Frame, but I'm playing around with it to see if anything suddenly complains.