So I have the shapes above (2 circles and 2 rectangles as seen in layers panel) I selected all and made a compound shape with alt+click on Exclude (I also tried tried the same with Unite and got the same odd behavior).
Then enter Isolation mode to edit them I select 2 shapes there to apply Minus front.
The thing is Minus front is not acting properly. it seems to just remove both selected shapes instead of just removing the top. (I tried reordering both shapes and I get the same results still).
If it helps below is the result I expect and I get if I do Minus front right before the creation of the compound shape.
Any help in explaining why this happens is appreciated (PS. the reason is that I'm trying to understand the behavior rather than just edit them).