If I create another test project the same, bring the charge rules down on to a sales order, then click next bill, or bill remaining, the invoice doesn't allow me to generate line items, since there are no charges yet generated. Then I go to the project, generate the charges, then the charge generates. Then I can go back and generate the invoice and the charge appears.
So I still have no idea how someone would have generated the invoice, without having the charge move to "Processed" and billed.