Coming back to this after some time but it looks like I did manage to find what was going on. In the layout the elements which were being nested were actually in a “card”-like UI block. The card itself was an “a” element, but also the menu activation widget inside the card was an “a” element. It seems that something very weird would happen to it when the browser would convert the HTML into a DOM - Chrome would actually restructure my DOM and place the element inside of which the “inner” anchor element was next to the card element - so it would become a sibling. That, in turn, would lead to all sorts of things breaking.
To circumvent the problem I had to replace the “a” element on the card itself with a “fake-link” activation using JavaScript. For now this will work as we are not subject to hard accessibility requirements, but in the future we will need to revisit this.
So event delegation was not the issue - the restructured DOM was.
Thanks everyone for your suggestions!