UFT freezes when a Modal Dialog window opens

Running UFT on Win7x64, UFT selects a menu option in AUT to show the app Help/About window (which is modal). Once the modal window displays, UFT freezes and is unable to run next steps (like checkpoints of the about window's fields and contents).

 

How can I get UFT to continue running. (Note the test was originally created in QTP 10 and runs just fine there and on QTP11).