I have a very good feeling it is gmail. I did not have this issue until after I installed gmail and the notifications started to come in.
That is when I started to see on instances the notification bar disappearing. Going back to the original carousel, opening gmail seems to have fixed the issue. In the play store, it says that it was updated for 7" tablets (most likely for nexus 7) but perhaps not having the proper support for the KFHD7. Uninstalled gmail and everything is back to normal.