This is a known issue but I am not finding it when I search the Known Bugs list.
As a work around, you might consider the method used in this demo file:
FileMaker 12 users: https://dl.dropbox.com/u/78737945/SimpleNameLookupDemo.fmp12
Pre FileMaker 12 Users: https://dl.dropbox.com/u/78737945/SimpleNameLookupDemo.fp7
I looked at that one and didn't think it fits this description....
Thank you for the post.
Please see the report for this issue here:
I added your feedback to the report made to Testing and Development.