Game Mechanics: FD/Sneak while Buying and Selling

[Iscar]

I'm not sure if this occurred with the patch or not, because I was in friendly territory up until this afternoon. Anyhow, now when I feign death I receive the message, "You cannot use a merchant right now." even if I sneak and am laying behind the merchant.

I can still sneak behind merchants in non-KoS territory to trade, but this isn't possible in places where the surrounding NPC's are hostile. Anyone else having similar problems?