Hello Chandra, 

Thank you for contacting Infragistics. What you are seeing is more or less to be expected. The busy indicator will steal focus, regardless it's "busy", whether content is above or below it. Note, elements above the busy indicator should be picked up through Object Spy buy ensuring the "black border" shows up. To do this you can hover over the top or top left corner of the control.

What it doesn't try and do is record what is beneath it. If you disable Test Advantage all together and repeat your steps you will notice the content beneath the indicator do get recorded but nothing above it will. In other-words, even UFT in general has trouble. 

I recommend having your developers implement an external dialog to remove (show or hide) the busy indicator while your are testing. 

To ensure compatibility is improved please suggest a new product idea for future versions (or vote for existing ones) at <https://ko.infragistics.com/community/ideas>.
Submitting your idea will allow you to communicate directly with our product management team, track the progress of your idea at any time, see how many votes it got, read comments from other developers in the community, and see if someone from the product team has additional questions for you.
Remember when submitting your idea to explain the context in which a feature would be used and why it is needed as well as anything that would prevent you from accomplishing this today. You can even add screenshots to build a stronger case. Remember that for your suggestion to be successful, you need other members of the community to vote for it. You can also link back to this thread for additional details.