It's not a bug. The problem is the engine doesn't know the reading animation should loop and keeps restarting it all the time.
You need to add a definition file which adds more animation properties. Normally this is done in the .act3D file (like you did), however for merged animations each .X file must be coupled with a definition file.
Simply put, create a new text file called "stand_n_read.anim" where your stand_n_read.x is located and the file will contain the following:
That will fix the problem.