Yes, that's weird. I don't know why it is doing that. (I'm attaching your images so others who read this thread can see them.)
It looks like VB
is "clever" enough to represent Milestones --> MilestoneUpdateRelationships --> MilestoneStatusUpdateHistory as a single many-to-many relationship. It's hard to imagine how (or why).
You might try right-clicking on that relationship and selecting Edit Relation just to see what it thinks it's doing. And you can try dragging the missing table into the model to see what happens.
Otherwise I'm at a loss.