I'm not convinced it's a bug. The memory is being used, just not ALL at once. The amount of memory used, is going to be based on the size of data required for playback multiplied by the readfactor. (unsure where the 3 times memorysize comes into it).
I use a Cubox (orig) running Archlinux as a NFS server with a Gigabit network, going to wifi on a 300Mbit extender back to Gigabit into a Cubox-i4 running LE. I've never had any issues with buffering, even with very large files.
You need to check the usage on all sides. Remember a RPi only has a 10/100base ethernet and max speeds are only in the region of ~40Mbs.
Use the tools available in the LE Repository, Network and System Tools. Use something like nmon/iperf to monitor the amount of data coming in and determine the maximum size received.
The way I think of it, is as a water supply.
[R1] ---P1--- [R2] --> U1
R1 is a reservoir (your NAS/Internet streaming provider)
P1 is a pipe (The bigger the pipe the more water can be supplied per second) (Your network).
R2 is a reservoir (Kodi buffering) - The size of the "reservoir" is set by memorysize.
The amount of water fed into the reservoir is determined by the amount being used by U1 multiplied by the readfactor.
So as long as enough water is coming through P1 to satisfy U1 then you should have no problems. R2 will fill as quickly as possible but if P1 or R1 cannot supply enough, then lagging and buffering will occur.
I have a feeling that if P1 can supply more to U1 than R2 can accommodate, then problems will occur (Dam burst), which might explain my problems with readfactor of 60.
Kodi buffering will NOT help a bad network/server, nor will it help a slow processor (Wait times loading the data).
Personally, I think the default LE settings i,e NO advancedsettings.xml should work for most users. If you must use it, adjust it incrementally and check your data.