I just checked my original fighter and he now has the transitions. Creating a new one in a separate slot must have jarred the bug. Sorry for all the mis-information, but things are looking great now.
Have you checked that you can actually use them in a match or just on the moves list?
Evil97 - I tried to deactivate my fighters, make new ones and then reinstate the old ones but it didn't give them the transitions so I just bit the bullet and made four new characters, deleted the old ones. Been really enjoying the mode since it has been mostly fixed and then...
There's a new bug since the patch where moves level at like 1/100th of what they are meant to or something. I didn't realise it was a problem as my main fighter was heading towards 3/4 star moves and I thought it just really slowed down, I then decided to prestige and bam, moves barely level. Back to waiting for fixes :>