Bugs aren't always NPEs. Business Logic bugs are still bugs.
Features like Night Shift also happen to reduce contrast. That doesn’t mean they are buggy, or that Increase Contrast is buggy.
It does mean that Reduce Transparency is not suitable if you don’t want reductions in contrast compared to regular-transparency Liquid Glass, regardless of whether you also use Increase Contrast.
I do agree that Liquid Glass as a whole is broken for anyone needing a higher-contrast UI. In my opinion, a GUI should be reasonably high-contrast by default, without special accessibility settings.