As others have said, no it’s not a bug. The lv 1 SOE Epic Arc gives option to choose between the 4 main Empire Factions. There are no derived standings incurred towards the other Factions when Faction standing increase is gained from Epic Arcs.
However if you do regular missions for SOE, you’ll get a Storyline mission offer after the 16th mission which will gain standing with SOE Faction. At the same time you’ll also incur standing, both positive and negative, towards all the other Factions.
The same thing applies to completing missions for Career, Circle, Data and Cosmos Agents as well. They give Faction standing increase which also incurs derived standings towards all the other Factions.
More information on repairing and or boosting standings can be found here: