It may be a bug, but I doubt it.  Consider the following:
When the check box is checked and you press shift, pause turns on. It turns on when you press shift, not when you release it.  If you press shift and type a letter, let's say b, speech is interrupted and pause is turned off.  In other words, pressing shift turns it on and typing a letter interrupts speech, which overrides the pause function.

If the check box is unchecked, how is NVDA going to know whether to pause speech or not?  It will pause speech whether you just press shift or press shift and type a letter.  This is not what is intended because it disables the noninterruption of speech when typing shifted letters.  My guess is that disabling the shift, pause speech feature is intentional when the check box is unchecked.

Gene