Yes, I've noticed quite a few little quirks like that while devoloping my IB API application. I'm glad you got it figured out though.
that is not a quirk, it is pretty apparent if you read through the API documentation and details about the paper trading account at IB (unless they have removed the explanation about how the paper trading account works in terms of IP tracking). It also makes quite intuitive sense, given IB allows you to open multiple paper trading accounts (at least I was allowed to open multiple sub paper accounts as part of my Fxxxxxx advisor account) that they do not want to have multiple parties watch real-time data on different machines. Most likely it has to do limitations imposed by the exchanges and data origination parties. If you consider this a quirk I wonder how you will fare when coding up a hook to IB's FIX engine ;-)
Sorry to resurrect a dead thread, but volpunter is right- the market data subscriptions do not permit even a second user on the same account to view them simultaneous with the paid subscriber. It's one pair of eyes per subscription.