@Dexter I resolved the issue of the item, between the two parties, in-game.
Code wise I think what is happening is the player who starts the auction got the gold and the item.
I confirmed on test.trueuo.com using a save of Heritage 7/16/2020 that the one on Molokai's auction block also went to his bank after Enoch won the auction.

Copy from Heritage TC of Heritage from 7/16/2020

After the auction ended today. Instead of going to the winner, it went to the auction creator, while also taking his gold.