I was trying to test what would cause this, and created a Normal game in Act 2 on Quest 7. After leaving that game, and going back to create a public game, I now show Quests 4-8 all in my public game selection screen. However, all of them were grayed out, except for Quest 7, which was available and showed one other player on that quest. Clicking join public game actually allowed me to join that persons game too, effectively allowing me to skip Quest 4-6 in Act 2 Nightmare.
Edit: I went back to the quest selection screen and chose Quest 10 from Act 2 Normal, and now my quest selection screen is back to allowing me to select up to Quest 3 (though 4-8 are grayed out). I then tried the same thing with Quest 6 (join it on normal, then go back to public games) and sure enough Quest 6 is now available in my public games on Nightmare even though I haven't progressed that far. Testing it out more thoroughly, it seems to work for every quest from 4-8 in Act 2, but nothing beyond. I'm not sure if this is the limitation of the bug, or a limitation oif my level (I might not be a high enough level to see public quests beyond quest 8 in Act 2).