This glitch just happened to me.
I was Dante, and fired my Level 3 as Parappa was in the middle of his Level 2. It should have countered his Level 2, but it didn't. I died.
However, the music for Dante's Level 3 was still playing in the background, even though the match just kept going on as normal. Except for one thing: all of the characters were black for some reason. I've attached a screenshot for reference (I was playing on Vita). I edited the names of other players out, just in case.
Anyone else experienced this? This is basically just another "My Level 3 got cancelled" thread with some weird side effects. Just thought I'd report it.