This sounds like a bug in the engine itself, does this only happen after applying my changes? Also using the source version will not solve this, they function nearly identically.
It’s easy enough to work around though. Make a post process material with a couple collection parameters, one for colour, one for alpha and lerp between postprocessinput1 and your colour with the alpha. You can drive those through blueprints and sequencer without issue and achieve the same effect.