I've unlocked the ability and neither the sword or npcs teleport sometimes. I click the teleport option on the sword or the npcs and both will sometimes go back to random interactions with them and don't teleport.
Also, I know if you talk to the npc's there's a cooldown (45 minutes?) - are you trying to go back within a limited amount of time to the same event? That might be it.
Things may be looking down now, but I see a light at the end of the tunnel;
Do you think I should get off the tracks?