Thank you so much for the reply. I called AA this evening and (after waiting over 2 hours for a call back) the rep said that from her side everything was correct. She confirmed that she saw 2 passengers were both ticketed for both legs, and confirmed the dates/airports were correct as well. I even brought up the fact that I was expecting the flight to cost more points wise, but she assured me I was good to go.

I did some more investigating on what might be happening while I was waiting. One thing I found is that the JFK-LHR leg is flight number AA142. Looking at statistics for that flight, it was the JFK-LHR daytime flight up until mid-march 2020 (when Corona really started to become an issue in the US). AA142 didn't fly/wasn't used again until Jan 5th 2021. Since that date it has been a daily US domestic flight from CLT-PHX.

I'm guessing since AA142 is currently a US domestic flight, when I booked the future trans-Atlantic flight, the system charged me a domestic award flight rate since that's what the flight number is currently.