Is flyto supposed to work when you are inside and behind closed doors?

For some forms in some cases, yes.

Any chance of elaboration? If the reason it can happen is balance and mechanics, then OK. I understand that. But it just seems a bit of a stretch.

Not all air forms are equal when it comes to their flying skills and this is a perk/drawback of different forms.

They can fly through doors because of pass door btw, if they don't have pass door up they get an echo saying they can't fly through doors.

Some air forms can only flyto people outside, some can flyto outside and inside rooms. The ones that can't flyto inside rooms tend to also have penalties to their dodge ability while fighting indoors. For instance the falcon can fly indoors but the eagle cannot.