Found in Version:
Note that this is for the Telvanni side of the quest, as an active member of the House.
After finding the messenger's body and retrieving the cryptic note, I took the note straight to Nevrile Omayn, who then directed me to deal with Joslin Stoinles while she decrypted it; this put TR_m1_wil_KtM_2a at stage 25. I did so by luring Joslin and her compatriots to the messenger's body, which put TR_m1_wil_KtM_1 at stage 200 ("I have slain Joslin Stoinles and several of her compatriots near the body of the dead courier. It is unclear what they were doing there or what was going on."), presumably because I no longer had the cryptic note.
Returning to Nevrile, she lacked any of the dialogue or topics to advance the quest; a quick dive into the CS shows that Nevrile checks for TR_m1_wil_KtM_2a stage 25, and TR_m1_wil_KtM_1 at either stage 101 or 201. Stage 200 apparently prevents further progression, because Nevrile checks for stages 101 or 201 exactly, instead of greater-than-or-equal-to.
I did not test, but I assume stage 102 ("I have discovered a dead body on the road near Bal Oyra. On the corpse I found a message written in code, though it was clearly addressed to Joslin Stoinles. I believe that I have already killed her. Perhaps the Telvanni would have an interest in the message.") will lead to the same problem.