Dissolves don't fully complete when clips are on different layers
Dissolves work fine when both clips are on the same layer. They don't work properly when one clip is above the other(s) and essentially fading to transparent.
If both layers are meeting on the same layer, there is a smooth transition from one to the other. If the transitioning clip is on a higher layer, there is a noticeable jump between the final frame of the transition and the first frame after the clip has ended (I'm talking about a dissolve out here, the same is true for in).
It's not always possible to have the clips on the same layer. Overlay graphics often need to fade on and off and those must be on a different layer. Sometimes I need to put a fade to/from black on a higher layer if there's a lot going on.
The only workaround is to use opacity keyframes with easing instead of the transitions.