The whole issue may be the result of your video card and/or driver.
The thing about AutoCAD is that MOST of the graphical interaction is reported from the display window. For example, try creating a closed polygon zoom into one corner of it making sure that part of the polygon is not in the display window. Then try to hatch the polygon. It will fail because the entire object is not visible in the screen.
The issue with this closed polyline could be the exact same scenario, only the program is picking up the points as being in the exact same place. They are after all only 0.0000999 apart. Not sure what you are trying to accomplish here, but that is mighty small.