Yeah I decided to remove the 'place=city' relation, and use the node to designate the city. (Previously the node was being use as 'label' in the relation.)  The OSM wiki's guidance is not dogmatic on the issue, but I felt the boundary relation had just been drawn empirically as a 'residential' area, using the satellite imagery, and it didn't correspond to any actual legal/administrative boundaries (either electorally or for local government). So I just left it purely as a (residential) land-use designation.  
Maybe Nominatum needs a day or two to refresh its cache, or however it works?  