Bug with AnimatorOverrideController with Sprites

Hi Unity (@Mecanim-Dev too), I have been hitting a bit of a problem when I apply an animation override controller to an object during an animation. The Animator is already overwritten so I am attempting to apply a new controller and think there may be a bug or i need to do something to wipe the override controller.

This happens when the animation I am playing is making a sprite turn to 0 in the Alpha channel. When the next animation override controller kicks in, it goes to an idle state which has no animation on it, but this (and any other animations) are affected magically by the last animations final frame/state before I applied the controller - so basically, if i Alpha out the sprite, change the controller, any animation then on that does not overwrite the alpha will be alphaed out.

I have managed to recreate in a basic project link text - some notes, I have two objects using the animator in question, both go to the fade animation, then when you press a button after this has complete, i overwrite a different animation in the animator. Note, it will not not show the buttons in the New State because the last frame of Test1 animation is being applied. Boot up the project, should work, wait for the first animation to play and press the button.

How do i sort this?

Thanks!