Yes, I've seen "fading kitten syndrome" before (or called "failure to thrive" in babies), and it's distressing to watch. As you say it's usually with newborn kitten or very young kitten, who after a day or two of suckling shows no interest in latching on to the nipple and keeps crawling away into a corner of the box, no matter how many times you put it back with momcat & litter mates. Feeding doesn't work, and I guess it's nature's way that "something" is drastically wrong. Momcat usually isn't interested in it either, so maybe she knows something we don't? But I agree a 3 mo old kitten showing these symptoms does seem unusual, at least I've never seen one at that age.
Did u check for a cleft palate?