When an icon selection dialog box is open, the panel (and of all its plugins) does not respond to the user input. It is still possible for the user to switch to another window or desktop using window manager, though. This may produce a situation where the panel is not responding to the user input and the user does not realize that this is caused by an icon selection dialog box buried among other windows.
It needs to be for the properties dialog. Possibility is to put property windows in their own window group.
Sounds like a wontfix judging from the last comment.