Upon testing further, here are some things I found:
This seems to be not only an issue with “Actor hidden in game” but all binary keyframe properties. I just did a test with key framing “cast shadow” and it also has the same issue.
I think this might be related frame mismatch in the level sequence in editor vs movie render queue. Maybe as the MRQ chugs along, instead of going to frame 5, it goes to frame 4.999 for example. This won’t be noticeable for a continuous animation like moving an actor, but obviously might break for binary keyframes. As far as I know, the level sequence does intra frame interpolation to smooth out animations. If I set the binary key frames back just 1 frame in level sequence for some actors it fixes for that object so perhaps this is part of the problem.
Related to the above, I thought that changing the FPS might help. My level sequence is 30fps, I tried changing to slightly higher or lower to fix the above issue, but it just broke it even more.