This bug is present in all supported versions of Joomla

Step 1

Steps to reproduce the issue

• On a 100% clean install create three articles with a readmore. Set all three articles as featured.
• Visit the home page of the site

Expected result

three intro articles with

1. sef urls in the readmore and/or linked title
2. sef urls for the linked category

Actual result

Partial sef link for the articles
http://localhost/joomla-cms/index.php?view=article&id=2:my-article-title&catid=2
Partial sef link for the category
http://localhost/joomla-cms/index.php?view=category&id=2

Step 2 (makes the bug more obvious)

Steps to reproduce the issue

• Using the same site from step 1
• Create a NEW menu item of type search and set it to be the home menu item
• Rename the previous home page and call it featured.
• Visit the home page of the site
• Now click on the featured menu item

Expected result

three intro articles with

1. sef urls in the readmore and/or linked title
2. sef urls for the linked category

Actual result

Partial sef link for the articles
http://localhost/joomla-cms/index.php/featured?view=article&id=1:my-article-title&catid=2
Partial sef link for the category
http://localhost/joomla-cms/index.php/featured?view=category&id=2

NOTE

my sef settings for these tests are the default for a clean install but it doesnt matter what they are the bug is the same.

Why can't I replicate this?

You will not be able to replicate this if you did not follow the instructions.
Basically if there is an existing menu item (category blog/category list/article) then that will be used in the featured view and this is why no one noticed this before.

Quick fix for a user

Create a menu item of type "List All Categories in an Article Category Tree" with a top level category of "root" and then in the Link Type tab set the option "display in menu" to No. Give the menu a title of "Content".

Go back and test your site the urls will be and the urls will be sef
http://localhost/joomla-cms/index.php/content/uncategorised/my-article-title
http://localhost/joomla-cms/index.php/content/uncategorised

This bug was reported at https://forum.joomla.org/viewtopic.php?f=816&t=992471&p=3655224#p3655224 but there were a lot of extensions and templates installed so it was hard to track it down - especially as I never expected it to be in core !!