Meursault, I agree with your point about IS. That double-letter cell is not suited to a subject on a NE to SW diagonal. However, in both the across entry and the down entry the letters for the words are in the sequence IS, however the solver chooses to place them in the cell. By the same token I guess one could argue that therefore they are in that sequence for the word to be highlighted.
Nevertheless, I do wish it had been done differently. The puzzle as a whole is good and was enjoyable to solve, but the grid strikes me as a bit sloppy.