uVision 4.14 LPC1768 incorrect watch for local variables

I'm trying to debug LPC1768 program in uVision 4.14 using ULink2 via JTAG. I have following scenario:
- main calls public function (LCD_Image) from other module (LCD) with four arguments (passed through R0-R3)
- this public function ONLY calls private module function (DrawImage) and passes the arguments to it (not sure, why the registers are moved back and forth...)

   890: void LCD_Image(int x, int y, const lcd_image_t *image, lcd_pixel_op_t pixel_op)
0x00002932 E8BD81F0  POP      {r4-r8,pc}
   891: {
0x00002936 E92D41F0  PUSH     {r4-r8,lr}
0x0000293A 4604      MOV      r4,r0
0x0000293C 460D      MOV      r5,r1
0x0000293E 4616      MOV      r6,r2
0x00002940 461F      MOV      r7,r3
   892:     DrawImage(x, y, image, pixel_op);
0x00002942 463B      MOV      r3,r7
0x00002944 4632      MOV      r2,r6
0x00002946 4629      MOV      r1,r5
0x00002948 4620      MOV      r0,r4
0x0000294A F7FFFCDE  BL.W     DrawImage (0x0000230A)
   893: }

- DrawImage then declares some local variables on stack

    uint8_t org_page        = y >> 3;
    uint8_t org_page_offset = y &  7;  /* LSB->MSB direction is rising y coordinate */
    uint8_t org_column      = x;
    uint8_t last_img_page   = (image->height - 1) >> 3;
    uint8_t last_fb_page    = MIN(org_page   + last_img_page,    LCD_PAGES - 1);
    uint8_t last_column     = MIN(org_column + image->width - 1, LCD_WIDTH - 1);
    uint8_t fb_page;
    uint8_t fb_column;

- The first three ones are calculated, stored to the registers and correctly shown, second triad (last_img_page, last_fb_page, last_column) is stored to stack locations and shown incorrectly. (All show 0x1a, which is value stored on stack top. The uVision ignores the offsets from SP).

   575: static void DrawImage(int x, int y, const lcd_image_t *image, lcd_pixel_op_t pixel_op)
0x00002306 E8BD83F0  POP      {r4-r9,pc}
   576: {
0x0000230A E92D4FFF  PUSH     {r0-r11,lr}
0x0000230E B085      SUB      sp,sp,#0x14
   577:     uint8_t org_page        = y >> 3;
0x00002310 9D06      LDR      r5,[sp,#0x18]
0x00002312 F3C503C7  UBFX     r3,r5,#3,#8
   578:     uint8_t org_page_offset = y &  7;  /* LSB->MSB direction is rising y coordinate */
0x00002316 9D06      LDR      r5,[sp,#0x18]
0x00002318 F0050407  AND      r4,r5,#0x07
   579:     uint8_t org_column      = x;
0x0000231C 9D05      LDR      r5,[sp,#0x14]
0x0000231E F00508FF  AND      r8,r5,#0xFF
   580:     uint8_t last_img_page   = (image->height - 1) >> 3;
0x00002322 7855      LDRB     r5,[r2,#0x01]
0x00002324 1E6D      SUBS     r5,r5,#1
0x00002326 F3C505C7  UBFX     r5,r5,#3,#8
0x0000232A 9504      STR      r5,[sp,#0x10]
   581:     uint8_t last_fb_page    = MIN(org_page   + last_img_page,    LCD_PAGES - 1);
0x0000232C 9D04      LDR      r5,[sp,#0x10]
0x0000232E 441D      ADD      r5,r5,r3
0x00002330 2D07      CMP      r5,#0x07
0x00002332 DA02      BGE      0x0000233A
0x00002334 9D04      LDR      r5,[sp,#0x10]
0x00002336 441D      ADD      r5,r5,r3
0x00002338 E000      B        0x0000233C
0x0000233A 2507      MOVS     r5,#0x07
0x0000233C B2ED      UXTB     r5,r5
0x0000233E 9503      STR      r5,[sp,#0x0C]
   582:     uint8_t last_column     = MIN(org_column + image->width - 1, LCD_WIDTH - 1);
   583:     uint8_t fb_page;
   584:     uint8_t fb_column;

Have you anybody also noticed this behaviour?
I'm also going to send this to Keil support.