Level Sequencer blending - skeletons seem to blend but mesh does not

Hi all,

I am encountering a strange issue. I am working on blending my animations in Level Sequencer to bake them as Anim Sequences to use for my NPC. Yet they do not seem to blend at all. One of them is a root motion enabled animation, while the other one is a basic idle stance with no root motion.

Here are the odd behaviors I encounter:

  1. If I have my root motion enabled in Anim Seq properties, the animation in Level Sequencer will be playing in place. If I disable the root motion in Anim Seq, the character moves in space. It does not make any sense.
  2. When I am trying to match clips with a bone, the skeletons themselves do seem to match, but the character skeletal mesh stays in place.

All these animations work well independently on the NPC as montages and basic roaming movement. As soon as put them in Level Sequencer, I have this issue.

Below is the screenshot of what I mean with the skeletons. I googled for a while and cannot figure it out.

Clarification: At this frame the skeletal mesh is idle and is supposed to be aligned with the green skeleton.