I often run into issues when I use assembly features in assemblies that have sub-assemblies with their own assembly features. Things work as expected for a while, but something changes and then I can't reference existing geometry to project to sketch. The geometry exists, but it is offset and rotated, so there is an invisible ghost silhouette that I have to click to do anything. It appears that the origin (UCS) gets switched from the assembly origin to the sketch origin. I'm attaching a screenshot for reference.
@tern I have seen that and it usually is related to out of date models. You may try using the Component Tracker tool to insure all models in the structure are up to date. If that doesn't work, you may need to go into the offending part model and force the feature tree to Recompute
Ken Production: SE 2019 MP8, Testing: SE 2020 http://Grundey.blogspot.com
@KennyG I tried updating with the component tracker and recomputing to no avail. Luckily, I did discover that opening the sub-assembly file by itself allowed me to by-pass the bug that I see when I go to edit the sub-assembly from the top assembly.