I've seen bugs regarding the LoR decision to restore Rome, but no this one.
The setup is a bit different, I do own Italy and all the usually required land (though the decision here does not require it). However, as soon as I restore Rome, all of my legions get disbanded, including the Roman one... that I'm the head of, for some reason. Two of the characters immediately in the line of succesion die, and the Empire falls aparat.
I can upload a save file, if it's needed.
EDIT: Come to think of it, it might be better to explain the circumstances a bit more.
I started on the earliest start date, as Zenon Tarasis. I quickly win the war for the Eastern Roman empire. I had previously noticed that, as soon as I do that, all the legions disband and found it a bit strange. This is, I assume, because Zenon isn't Greek culture. With quick pausing and the "Change culture to local" decision, I managed to circumvent that. I then set out to reclaim the lost Western Roman Empire using the usual methods, inviting claimants to kingdoms, landing them and pushing their claims. Within two generations, I reclaim everything.
A random event happened giving me a Latin character with lots of claims, good traits etc. I made sure he inherited me, and all the succeeding characters were also Latin. The legions continued to work as intended. After that, I tried to restore the Roman Empire and the rest is described above.