Still haven't managed to fix the chapter skipping issue with "Up". It's exactly the same problem as everyone else mentioned: it will skip to the next chapter during the newsreel scene in exactly the same spot (among other chapter skipping elsewhere on the disc).
Firmware is the most recent version, we tried playing it with a USB stick plugged in, still same problem as others mentioned.
Since the little pop-up showing chapter positions shows up when the skip occurs, I'm led to believe that this is an actual chapter skip operation, and not something less well-defined. It occurred to me that there might be a very very slim chance that HDMI-CEC (or "Simplink" as LG seems to like to call it) could have something to do with this issue (perhaps a buggy implementation in the player or the TV, as chapter skipping is a supported HDMI-CEC operation), so we tried turning it off (on the TV, as apparently there is no way to turn it off in the player) and it didn't fix the problem. Can't imagine anything other than a firmware update fixing this now.
I tried the online chat with LG, and asked about potential in-development firmware for this player. The person didn't seem to know what I was talking about, didn't believe me when I explained to him that the Blu-ray player can connect to the Internet and obtain firmware updates, and insisted that software/firmware updates are "sent out on a CD" to all their customers. So, not helpful.
I sent a non-chat message to their support detailing the issue, and asking about firmware once again. I don't have high hopes, but if I get a useful response I'll post about it.