I've recently uploaded a demo of my problem here
so it would be easier to see the problem.
What happens is that when you transform, the actor's ID actually changes to a different ID.
MOG's script displays a particular sprite when it has determined that a particular actor is "active".
Active simply means the ID of the battler that is choosing an action is the same as the ID stored in the sprite.
This explains the two behaviors
1: when your actor was alone and the ID changed, there was no sprite that corresponded to it because all the sprites are generated when the battle begins based on the initial make-up of the party.
2: when the second member was in the party, and your actor's ID changed to that, the second sprite is displayed because both actors had basically the same ID
I can provide a solution but it would be basically modifying MOG's script to not use static ID's and I'm not sure if I have the permission to do so.