When Free Distort effect is applied to a path with a freeform gradient fill (we all now know it’s not a real fill), the stops just vanish if they happen to 'fall out' beyond the resulting path — the same way they get dropped when you edit a path with a Direct Selection tool (which can also be treated as a bug, because you are just ditching user data — these color stops should be able to be placed outside of the path!)

Images 6 and 7 show what happens if you try to make the shape larger than the original with same effect — we gat to see that technical offset Ai generates to work around the nature of the triangular mesh fill generated.

It all looks like the effect gets applied to the invisible clipping mask of the resulting container, not like it happens for a NORMAL fill.

...but, if you drag the effect above the fill in the Appearance panel (image 8), you’ll get the look we wanted to create in the first place.

Nothing like this happens for ordinary gradients, there is no visual difference if the effect is above or below the fill. However, the fill is actually never distorted at all — which is not cool. You have mesh tech! 'Distort linear gradients', as envelopes can do! Distort freeform meshes too!

And yeah, you need to integrate new tools better.