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Whoever captures Funchal by amphibious assault can never capture the port. (There is no "land angle" to occupy, by which port capture occurs in the game.)

Where is this port?

It's north of the Canary Islands in the Atlantic.

The island and port are effectively no different to Malta, so I'm not sure the port isn't transferring to your control as I'd have thought we'd have had reports of the same not happening with Malta.

Has anyone experienced a similar problem at Malta?

Never had an issue like this with Malta. I think I invaded Funchal Madeira once in my life but I can't remember. I'm guessing if it created an issue I would remember.

I keep seeing this thread an my mind reads it as "Funky Cold Medina".