PlayersOnly command freezes players when used

The "playersonly" console command doesn't appear to allow the player to move. The player animates and everything else stops, but the player can't move around in the world.

1. Open the third person template
2. Play in Editor
3. Press the '~' key to open the console
4. Type in "playersonly" and press enter to confirm

Result: The player looses input and no longer moves
Expected: Everything else would be frozen while the player remains unaffected