My understanding is that Flash used to have a cast time, but would break all projectiles coming at you.
When Riot made the change to instant. They made it so Flash would only break projectiles if they lost sight of you. I assume this is so the enemy couldn't just follow an auto attack to find you, removing any outplaying.
Lee turning himself into a projectile should work the same. The bug seems to be that if there isn't a bush, he can teleport. But this could also just be the spot you tested this at. Making the problem Baron Pit. It could also work like Rek'Sai's tunnels. Where you can actually place one going into a wall, and you will come out the other side of the wall. Even though the tunnel's exit is on the other side.
Testing it over say the red buff wall. Or around a corner at wolves where vision can be limited would help prove/disprove this.