IIRC this is not a bug, but the description is a little misleading! The first level give +1 Morale to Humans & Elves, the second level +1 Morale to Humans, Elves, Dwarves & Orkes and the third level gives +1 Morale to Humans, Elves, Dwarves, Demons & Lizardmen, BUT the boosts did not stack, which means, that the highest boost for each race (except neutrals & undead) is +1!
To be more precise: Humans will get their +1 Morale boost with level 1 and NO ADDITIONAL two other +1 boosts with Persuation Levels 2 & 3!
Best regards
J.B.
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