In general, we've got some issues related to the data prefetch (the items with 'Loading..." text), but it fixed in the latest internal build and recently released BETA version of Q2 2015 release. You can try a newer version of Kendo UI.
With regards to the particular setup, you will need to define a valueMapper
callback. Even though the binding is local, the widget still does not know selected items in which exactly is present after filtration for instance. You will need to develop a function that maps selected values to item indices.
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