I have looked at this a little more and the command is having trouble selecting on the display list. I was able to reproduce the error.
After selecting the Point option, instead of a left click (F1) on an object, try selecting using the F3 or F11 (or of course corresponding mouse buttons). This selects the entity in the database directly and the layer change works. Any point in the desired layer will do, such as a Repeated Item origin point or the endpoint of a line.