Indeed, this is a known issue. The problem happens when the site is set to use this permalink structure /%category%/%postname%/. This is also what is set on your site in Settings -> Permalinks.
This issue is not an SEO problem because if you check the source, the canonical URL will always be the same: hidden link, so Google and another search engine will not find or index it. You can get it only if you access them manually. This is just a cosmetic issue.
We've published an errata page about this issue. You can see it here.
We don't have a workaround for this issue. Our developers will fix it in future versions of WPML. We'll update you here once we have news about this issue.