It´s strange that promotion work after restarting the server. LifeCyle promotion is a very reliable feature in Innovator once it´s set up correctly.
1. I see that you use Identity "Creator" and "Component Engineer". Are your users assigned to these Identities?
2. Does your permission allow users to "update" the item?
3. Are all of your items affected? Or does promotion just fail for a few specific ones?
I asked for SQL, cause the state you see is sometimes not the state you really have. And this would lead exactly into the behavior you describe.
This can happen when you change 'state' in SQL database manually to "repair" something. Or if you have used some of the admin functions.
4. Do you have used "Set default lifecycle" or "Reset permission" for some of your items? When you use the history, you could see it there.