I thought I would give a quick explanation of what is going on, and why it behaves the way it does, because, to be honest, it is confusing.
That setting is really just a filter on the timeline. What it says is: If a component is active, only show the features in the timeline that are directly owned by that component. It does not change the entries or order of the features in the timeline. This is a view of a design with Component2 active, and the filter applied:

If you turn off the filter, it looks like this:

note that all the features to the right are still there, even with the filter on. If I then move the marker one step back, the filtered view looks like this:

remember, all those features to the right are still there, but hidden.

This is where the confusing part comes. With the filter on, if you roll the timeline all the way to the right (even with the "to end" button), the filtered view is the same as above. But, what is really happening is this:

That is just a development choice we made - it seemed reasonable that, with the filter on, you should not move the marker to a point that is filtered out.
here's a screencast:
Jeff Strater
Engineering Director