Symptoms

The client used the "Activity Instance Destination" field parts on an activity level escalation and saw errors during the build stating the following: (Process) The escalation action 'DefaultEscalation' on activity 'DefaultActivity' cannot use the activity instance destination user because it is not available on Activity Level.

But, he was able to use the "Activity Instance Destination - Participant Name" field part and that did not cause an error during process build, but did cause the same issue during runtime.
 

Diagnoses

When we come to that activity during runtime and we try to "plan" the escalation, we will not have any context of the things that is going on the activity instance destination level. This is the reason why we stop you when trying to deploy the process.
 

Resolution

The fact that we stop you from using the "Activity Instance Destination" field parts on an activity level escalation is by design. You should not be able to use the "Participant Name" field part either and that has been confirmed as a bug. This should get fixed in a future build of K2 blackpearl.