I have worked on an SR as well for this with Oracle,
The reason for this is that the migrated project(from older versions to 12C), is not creating the right folder structure same as, if you create a fresh one from scratch in 12C.
So, If you are migrating a project from 11g to 12C, then there is one extra step that needs to be done so that, you fault policy is correctly picked up. Do the following step ONLYif you have migrated the SOA from 11g to 12C, otherwise this step is not needed.
Change the file path for property name="oracle.composite.faultBindingFile" from "fault-bindings.xml" to "SOA/fault-bindings.xml".
Then the fault policy will start working.
Hope this helps.