I also added a path grid as well.
And what happened was...
Weird, to say the least. After entering an interior and exiting back out, the townspeople all start jumping, and whichever of the two cells I wasn't in is gone completely.
After a while, the current cell looses its collision, everyone falls through and dies.
Also, the mini-map shows it as the cell two blocks up.
So yeah, what's going on.