I think this is an actual bug… 
I encountered this behaviour a little while ago, but though it was just me not doing it right, or a glitch in PIO Home as I’m on the beta / dev version.
Anyway, on PIO Home 3.1.0-rc.2 / Core 4.1.1b9 I can reproduce this… doing an ‘Install to…’ and picking a project gives all appearences that the library is installed, but it isn’t and PIO Home appears to remember it was installed, as a retry says that it’s already installed. I picked a random library, Timer, since it had been recently updated.