Blade tool accuracy is off- not cutting on playhead

When trying to cut (using either the CMD+B or blade tool to cut on the play head) it is offsetting the cut to the beginning of a 1 second grey block instead of where the playhead actually is.

How can I get the blade tool to cut on the playhead instead of being offset?

Here is a screen shot of where I'd like the cut to happen (as per playhead)

Here is a screenshot of where the cut actually happens (at the beginning of a 1secondgrey block within the timeline)

Here is a quick GIF of the problem as well: