After a child component's render() method returns null, any subsequent renders cause the component to render in the wrong order.
Yup! I think there's another issue open for this but I can't find it, and it was a little clouded by associating the effect with Redux. The issue is already fixed in Preact 8, which I'm hoping to release very soon. Here's your fiddle running against my local copy:

Awesome! Should I close this or leave it open until Preact 8 is released?
We can leave it open, I think over half of the open issues right now are fixed in 8 haha.
I think there's another issue open for this but I can't find it
Most likely #581?
Yes! Thanks a bunch.
Fixed in 8.