Does that mean that it is inherently bugged?
In the vanilla game (and LtC) there's an entry "free upkeep bonus 1" at the wooden castle level. All other castle levels don't have that line.
Without testing I'd assume that if you add those lines to the other castle line structures like motte_and_bailey, castle, etc. it should work. Judging by the edu file it was intended for castles to have free upkeep slots.

R'as