Funny that @frollic said the same thing I did here in your double post.
Usually when having a log server you are expected to send all the logs untouched to the log server and let rsyslog on the server do the working and filtering on the incoming traffic and on the same server you have logrotate that rotate the logs.
That is how I did it and it works just fine.
Are you sure it is even a feature to have the two log programs on the OpenWrt device and expect them to work together.
As far as I can remember from the OpenWrt user manual for logs you must stop and remove logd if you want to use something else to handle the logs.