Just to prove that it is probably a DO bug. The following produces an 'Entity is removed' Exception in DO code.

((Person)((VMPerson)person).ModelEntity).Z_LastNameList.Count

using System;
using System.Collections.Specialized;
using DOProject1.Model;
using Xtensive.Storage;
using Xtensive.Storage.Configuration;

namespace DOProject1
{
    class Program
    {
        static void Main(string[] args)
        {
            using (Session session = Session.Open(Domain.Build(DomainConfiguration.Load("Default"))))
            {
                DisconnectedState disconnectedState = new DisconnectedState();
                disconnectedState.Attach(session);

                Person person = new Person();
                person.Z_LastNameList.CollectionChanged += LastNameListCollectionChanged;
                LastName lastName1 = new LastName();

                lastName1.Z_Person = person;

                System.Diagnostics.Debug.Assert(person.Z_LastNameList.Count == 1, "LastNameList count == 1");

                LastName lastName2 = new LastName();

                person.Z_LastNameList.Add(lastName2);

                System.Diagnostics.Debug.Assert(person.Z_LastNameList.Count == 2, "LastNameList count == 2");

                lastName1.Remove();

                System.Diagnostics.Debug.Assert(person.Z_LastNameList.Count == 1, "LastNameList count == 1");

                person.Z_LastNameList.Remove(lastName2);

                System.Diagnostics.Debug.Assert(person.Z_LastNameList.Count == 0, "LastNameList count == 0");
            }
            Console.WriteLine("Test is finished");
            Console.ReadKey();
        }

        static void LastNameListCollectionChanged(object sender, NotifyCollectionChangedEventArgs e)
        {
            EntitySet<LastName> set = (EntitySet<LastName>)sender;

            switch (e.Action)
            {
                case System.Collections.Specialized.NotifyCollectionChangedAction.Add:
                    System.Diagnostics.Debug.Assert(set.Contains((LastName)e.NewItems[0]), "set contains newitem");
                    break;

                case System.Collections.Specialized.NotifyCollectionChangedAction.Move:
                    break;

                case System.Collections.Specialized.NotifyCollectionChangedAction.Remove:
                    // The Contains() of the set throws an 'Entity is removed' Exception?
                    foreach (var item in set)
                    {
                        if (object.ReferenceEquals(item, e.OldItems[0]))
                        {
                            System.Diagnostics.Debug.Assert(false, "set not contains newitem");
                        }
                    }

                    break;

                case System.Collections.Specialized.NotifyCollectionChangedAction.Replace:
                    break;

                case System.Collections.Specialized.NotifyCollectionChangedAction.Reset:
                    break;

                default:
                    break;
            }
        }
    }
}

using System;
using Xtensive.Core.IoC;
using Xtensive.Storage;
using Xtensive.Storage.Configuration;

namespace DOProject1.Model
{
    [Service(typeof(KeyGenerator), Name = "AbstractEntity")]
    public class AbstractEntityKeyGenerator : CachingKeyGenerator<int>
    {
        [ServiceConstructor]
        public AbstractEntityKeyGenerator(DomainConfiguration configuration)
            : base(configuration)
        {
        }
    }

    [Serializable]
    [HierarchyRoot, KeyGenerator(Name = "AbstractEntity")]
    public abstract partial class AbstractEntity : Entity
    { // START partial class
        #region DataObjectsFields

        [Key]
        [Field(Nullable = false), FieldMapping("Id")]
        public int Z_Id { get; private set; }

        [Field(Nullable = false), FieldMapping("CreatedOn")]
        public DateTime Z_CreatedOn { get; set; }

        [Field(Nullable = false), FieldMapping("CreatedBy")]
        public int Z_CreatedBy { get; set; }

        [Field(Nullable = false), FieldMapping("ChangedOn")]
        public DateTime Z_ChangedOn { get; set; }

        [Field(Nullable = false), FieldMapping("ChangedBy")]
        public int Z_ChangedBy { get; set; }

        [Field(Nullable = false), FieldMapping("IsDefault")]
        public bool Z_IsDefault { get; set; }

        #endregion //END region DataObjectsFields
    }

    [Serializable]
    public partial class LastName : AbstractEntity
    { // START partial class
        #region DataObjectsFields

        [Field(Nullable = true), FieldMapping("Name")]
        public string Z_Name { get; set; }

        [Field(Nullable = false), FieldMapping("PersonId")]
        [Association(OnOwnerRemove = OnRemoveAction.Clear, OnTargetRemove = OnRemoveAction.Clear)]
        public Person Z_Person { get; set; }

        #endregion //END region DataObjectsFields
    }

    [Serializable]
    public partial class Person : AbstractEntity
    { // START partial class
        #region DataObjectsFields

        [Field(Nullable = true), FieldMapping("PersonnelNumber")]
        public string Z_PersonnelNumber { get; set; }

        [Field(Nullable = true), FieldMapping("Nickname")]
        public string Z_Nickname { get; set; }

        [Field(Nullable = true), FieldMapping("FirstNames")]
        public string Z_FirstNames { get; set; }

        [Field(Nullable = true), FieldMapping("BirthDate")]
        public DateTime? Z_BirthDate { get; set; }

        [Field(Nullable = true), FieldMapping("DeathDate")]
        public DateTime? Z_DeathDate { get; set; }

        [Field(Nullable = true), FieldMapping("AHVNumberOld")]
        public string Z_AHVNumberOld { get; set; }

        [Field(Nullable = true), FieldMapping("AHVNumberNew")]
        public string Z_AHVNumberNew { get; set; }

        [Field(Nullable = true), FieldMapping("Title")]
        public string Z_Title { get; set; }

        [Field(Nullable = false), FieldMapping("IsUnknown")]
        public bool Z_IsUnknown { get; set; }

        [Field(Nullable = false), FieldMapping("WantsToStayAnonymous")]
        public bool Z_WantsToStayAnonymous { get; set; }

        [Field(Nullable = false), FieldMapping("IsUser")]
        public bool Z_IsUser { get; set; }

        [Field(Nullable = true), FieldMapping("WindowsLogonName")]
        public string Z_WindowsLogonName { get; set; }

        [Field(Nullable = true), FieldMapping("UILanguage")]
        public string Z_UILanguage { get; set; }

        [Field(LazyLoad = true)]
        [Association(OnOwnerRemove = OnRemoveAction.Clear, OnTargetRemove = OnRemoveAction.Clear, PairTo = "Z_Person")]
        public EntitySet<LastName> Z_LastNameList { get; set; }

        #endregion //END region DataObjectsFields
    }
}