Ok, so my toon got caught pickpocketing, and the mark got angry and started a fight. Working on Felonious Recompense, so great opportunity for a higher bounty to pay off! Go up to the platform with Suravis Otheran (theif NPC), above the alchemist shop, to wait off the heat. Immemdaitely the guard below casts talons. Moved a few steps away from the guard, talons again. I waited to see if the guard was running up, but no. The guard was still on the ground, just casting talons.
Seems that either the guard shouldn't be able to detect a bounty on what is essentially a second floor, or should run up the platforms to the second floor. It would also be logical for guards to not be able to cast abilities through walls, floors (chains, talons, stone fist).