The described issue indeed is reproducible with the latest available version of the Telerik UI for ASP.NET AJAX.
After some further research I found that this issue is already fixed. The problem is related to the setFocus method which is currently improved. The resolution will be included in the upcoming official release of the suite (2014 Q3 SP1).
I suggest testing again with the online demo after the official release is live. If there are further concerns on the matter do not hesitate to write back.
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