I took some time to try & repro this & failed completely.
I tested with Mame .247 (binary downloaded from official site), 64-bit build loading mk.zip with default settings (dip switches, etc.).
I got to "Test Your Might" at least 50 times & never saw the glitch (some real playthrough, some using save states). Do you recall anything else from your session? I know this is random but it seems pretty rare based on my (limited?) tests.
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