I'm not entirely sure why this happens, but in some instances the Drupal.settings.views_rotator object for each instance contains an array of values (one for each item in the rotator) instead of just a single value.

Instead of:
{"fx":"fade","timeout":8000,"speed":4000,"pause":1,"cleartype":1}

It looks like this:
{"fx":["fade","fade"],"timeout":[8000,8000],"speed":[4000,4000],"pause":["1","1"],"cleartype":[1,1]}

The problem is, that apparently the cycle() function expects a single value, so passing in arrays instead throws an error in the console:
[cycle] unknown transition: fade,fade

I've implemented a fix in the views-rotator.js file, which solves the problem, but I'm still unsure as to why this even happens. I haven't gone through all the code yet, as this seems to fix it, but this is still a workaround to a problem that occurs somewhere else.

My fix is to insert a small loop to iterate through the settings object and set array values to the respective first value in the array, before passing the object to the cycle() function:

Drupal.behaviors.views_rotator = function(context) {
  $.each(Drupal.settings.views_rotator, function(id) {;
	
    // reset object params as single value when value is array
    for (var param in this) {
      if ((typeof this[param]=='object') && this[param].length>1) this[param] = this[param][0];
    }

    $('#' + id).cycle(this);

    ...