Bug/Issue It appears that Outlaws can no longer be recruited.

What Happened?

I and one other player have been playing together on a server for a couple of weeks. We both know how to recruit Outlaws, and neither of us have been able to do so. When we get an outlaw to surrender successfully, one of the following outcomes takes place:

1. The Outlaw becomes a normal villager.
2. The Outlaw switches into red Soldier garb, and expresses an interest in joining the crew as a Soldier.

What were you doing in the game at the time?

Running a defeat-the-outlaw quest for a villager NPC.

Whether you were able to trigger the bug again by repeating what you did.

The other player and I have consistently encountered this problem, to the extent that we have been unable to recruit Outlaws for our crew.

Your operating system name and version.

We are having this problem on both Mac and Windows 10. The server is running on Windows 10.

Are you using any mods? If so, which ones?

Absolutely not. This is 100% vanilla, untouched by any mod, ever.

Whether you're in full screen or windowed mode.

We're both playing in windowed mode, but I doubt that has any bearing on this specific problem.

Additional Notes

This is a very, very fresh problem. I recruited an Outlaw on another character relatively recently (but before 1.2).
Others appear to have mentioned this bug on the 1.2.1 Changelog thread. I'm primarily reporting it over here to ensure that it doesn't slip through the cracks.