Response from the Moto forums;
" Yeah, it's inconsistent. When it works correctly it should work when texting other Verizon users. Right now there are some network conditions where it won't do that consistently. It's been root-caused and I expect it to be corrected in a future update. Sorry about that. "
So I'm saying its Moto that messed it up.
It would be nice if someone would acknowledge they made a mistake so we would know who to go to for status updates on this problem. Knowing that your SMS got delivered (not just sent) should be considered a high priority fix I would hope