Cloth doesn't transform properly when previewed in sequencer while simulation is paused

After pausing a simulation, sequencer does not pause. Any cloth part of the sequence does pause while the rest of the sequence is still playing. 

When closing the sequence and setting the sequence to Auto Play, pausing the simulation also pauses Sequencer. 

This issue reproduced in UE4/Dev-Sequencer at 6540101 and Binary-4.22 at CL 6574378. 

1. Open Content Examples
2. Place the Skeletal Mesh Owen
3. Create a new level sequence and add Owen to it
4. Keyframe Transform 
5. Scrub to a later frame in Sequencer
6. Move Owen forward 
7. Keyframe Transform 
8. Set Sequencer to loop and play
9. Select drop-down next to play and select simulate
10. Press pause 

Results: The trench coat does not move but the Skeletal Mesh does. 

Expected: Sequencer should pause or cloth should not be paused.