Hi,
When using Display as Mesh the number of segments and polygons that can be displayed in the viewports are defined by the Display->Limits values. If the numbers exceed these values RailClone will simply display the RC icon, but as you described it should render fine. It is possible to increase these values but RailClone tools is preferable in most cases as it will create instances to help improve memory usage.
Hope that helps,
Many thanks,
Paul