Initially Nemesis fights were working fine for me, but fairly early in campaign, around level 20, both Nemesis and the crystal-imprisoned enemies stopped spawning when I activate them.
Nemesis still brings up the Empower, Ban, Challenge UI. Banning works, both Empower and Challenge fail to spawn the fight (and Empower does not improve items the next time I get to a Nemesis encounter).
(In case it matters: I play with an offline character.)
For me it resolved itself after a few days. I don’t know why it started or why it stopped - but fingers crossed that it will also self-resolve for you.