If it wasn't using the emby ffmpeg (due to some sort of packaging error on Embys part), it should work fine as ubuntu ffmpeg works great across many applications I use. Unless, it requires an older version for some reason. Perhaps the bif generator doesn't run with a full path or setup the environment correctly. I agree, it does look like what you describe.
It makes me think emby needs a code correction for the thumbnail generator.
I think this could be proven easily enough by renaming temporarily the ubuntu ffmpeg, though this wouldn't handle the case where using emby ffmpeg but using non emby ffmpeg libraries. In the log, you can see that the episode grabber does use a full path. Unfortunately, simply renaming /usr/bin/ffmpeg and rerunning the generator produces the exact same file. Strange!
If there is any debugging tool, or shell stuff I can do to help figure this out, please let me know. I'd love to make this work somehow. I presume that 2 graphics cards isn't hurting anything...
Emby requires the exact ffmpeg version that it is packaged with.
When you say that you have been able to recreate bif files after deleting, then you must also see the extraction logs.