This happens occasionally. I'm not sure what causes it, but it's very frustrating because it forces me to look at one of the close-range weapons (those which function at Range 1) to see whether they are lined up next to my mech or not.

In this picture, you can see that the Yelloworm Weapon shows "Out of Range," despite the Range Indicator (the red spikes) showing that the enemy is in the correct location.

In fact, the "Out of Range" message is correct, but the Range Indicator is in the wrong position. For some reason, it sometimes appears 1 space *further* from my mech than where it should be.