I was in Understone Keep, about to talk to the Jarl, and Ondolemar passes me, says some rude comment, and I kill him. I get a 120 bounty, and when I escape the hold, it's gone.

Has anyone else encountered this?

Different holds mate.

Yes, but the bounty should still be in his stats.

All the time.

He never said he went back to Markarth nor did he state he looked at his stats so I am just assuming at the moment he was confused with the bounty system not transferring between holds.

I always slip him a poison and watch his men kill him for me. no bounty.

I have been back to Markarth multiple times since. There is no bounty, and no one seems to care.

I think a bounty of 120 is low enough to not be attacked automatically by the guards, question for you though.

Do the guards say wait I know you?

Nope.

Weird, never had this happen to me before.