Nevermind! I have yet another update from the front! The issue seems to be that the grandson, Doux Anthemios II of Azov was named the Despot (the honorary title). Once I gave that title to Staurakios instead, Staurakios was also the heir to the byzantine empire as well as the other titles. This is because giving this title to an heir makes them count as if they were born in the purple.
Since he was then "born in the purple" he received preference for byzantine empire title since that title in particular prefer children with that trait to the children without. The more you know.
I.e. rather than changing succession law you could have simply given the title of despot to your son instead of your grandson.