Follow Up and what happened
AA put in a remark re baggage allowance in the reservation, and QR confirmed that they see the remark. However, QR says that with ticket reading zero baggage allowance and only a remark that says there is baggage allowance, it is up to the check in agent to interpret the rule. QR suggests that the ticket should be re-issued just to be safe.
Followed AA on Twitter and sent them a message. In parallel, Called AA number in Asia, got through to Malaysia, asked to be put through to American Advantage. Told the person that he may need to involve supervisor right away. Shared the whole story. Person said he would speak with "back end" and a few minutes later, the ticket has been re-issued and everything appears to be in order. Meanwhile, wrote into AA Twitter to say that the issue has been resolved.
There is still an outstanding issue if I really want to pick on it... If you purchase a ticket on QR, you can purchase additional baggage on manage my reservation page. For a redemption ticket on AA, you can't access "purchase additional baggage", and you would be subject to US$40kg per additional kg (for my itinerary at least). I don't need additional check in baggage, but just FYI.
Perhaps took 4 phone calls to QR and 4 phone calls to AA and a total of two hours of getting this resolved. But at least everyone I spoke with along the way helped me one step forward. Though yes AA should fix this systematic issue once and for all.