Hello Ian,
We got a response from SAP support that this behavior is by design. The Sort Order is lost when a field is removed from the report layout. After adding the field back user needs to do a Sort Asc/Desc to have them in the right sort order which will be as per back end query (Key or Text). SAP note 1769239 and 1835154 explain the same. Hope this serves as a reference for folks in future.
Thanks,
Anil