The bug seems to only reproduce when setting animations in sequencer and only if the animations are set to "Keep state". Setting them to "restore default" makes the reversed animation play correctly but comes at the obvious cost of reverting the character to whatever the previous state was, which is unwanted (e.g. in our case, we want the character to stay in the "sleeping" position for a while and then play the reversed animation to "wake him up" later on).
Furthermore, setting the animation to play twice - forward and then in reverse - in an animation montage also works correctly.
Two more unexpected behaviors can also be observed in the project which could be separate issues from the one described above but are reproduced together with it:
1. The character will play the animation again - for the 3rd time - reverting them to the sleeping state after attempting to "wake up", despite not being set up to behave this way in the sequencer.
2. Ejecting and repossessing while in PIE affects the character pose. For one of the characters, ejecting and repossessing twice in the given example puts the character in the expected pose after sequence has finished playing.
This was reported and tested in 4.20.3 (CL-4369336). This was reproduced in 4.21 (CL-4541578) and Main 4.22 (CL-4589258)
Results: After playing the original animation, the characters' models are rotated in space when playing the same animation in reverse
Expected: While playing the same animation in reverse, the character reverts to the initial position (and stays in it if the animation is set to keep state)
There's no existing public thread on this issue, so head over to Questions & Answers just mention UE-66847 in the post.