See linked UDN for more info.
This looks to be because of how OnRep_Timeline handles any changes to the component's FTimeline struct. If the timeline isn't playing, OnRep_Timeline will call SetPlaybackPosition, resulting in Update being called. However, if one of the struct's other properties is changed, such as the play rate, then OnRep_Timeline will still be called and set the playback position, even if the playback position hasn't changed.
See linked UDN for repro project.
For a replicated timeline component, have the authority change the play rate.
Expected: the timeline on the server and clients will not call Update
Actual: the timeline on the clients will call Update
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-149942 in the post.