I created a tracker item about this a while ago but I thought I'd bring it to wider attention to get some confirmation that this issue is manifesting in other peoples Moodle installs. In essence last modified submission value is problematic. Rather than recording the last modification date (or even last "touched" date), it seems to represent the last viewed date which then sticks as the last updated value. Could people confirm that my report on this is correct, you can read the exact details at.
It seems to have been introduced around the time of Moodle 2.7 and I have reproduced it in 2.9 and 3.0