Hmmm! Maybe a Mojarra bug? I doubt that it is a problem with PrettyFaces as the link component doesn’t know anything about composite components.
You could try if this bug is reproducible with other components that accept <f:param> tags as child components. Perhaps you could try to use <h:link> instead of <pretty:link> in the same composite component. It would be interesting to see if <h:link> works correctly if it gets <f:param> child components via <composite:insertChildren/>.
Do you play Magic?
Get TopDecked MTG, the #1 Magic App, built by players, for players. Free to use, forever.