I don't think the modified rules have anything to do with it. The lines just disappear.
Personally I'd say that's not even the biggest problem with the diplomacy screen. Some whole CIVILIZATIONS are mysteriously going AWOL from my diplomacy screen. E.g., I have embassy AND spy with the English, they're right next to me on the map, I can investigate their cities, but I can't talk to the queen. Go figure. Or in a game I wipe the Babylonians out, but they respawn somewhere else, at the other end of the map. They're not in my diplomacy screen, however, so I can't even ask for peace. I stay at "war" for a few hundred years, war weariness and everything, until they finally contact me themselves.
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