As I was about to complete writing this question, I ran parallel --version to report the version, only to find:
WARNING: YOU ARE USING –tollef. IF THINGS ARE ACTING WEIRD USE –gnu.
It is not clear to me why that flag is set by default. Needless to say, using --gnu worked!
Thought I would post this to save someone hours of frustration and confusion.
EDIT:
To fix this permanently (in Ubuntu at least), delete the --tollef flag in /etc/parallel/config