Interestingly, the SET PAUSE ON option doesn’t pause the animals or AI aircraft or cars or anything else either. I actually think it is what active pause was meant to be. Don’t know why there are both options. I’ve alsoe seen questions on why is there a SET PAUSE ON and SET PAUSE OFF option and not just a simple TOGGLE PAUSE ON/OFF. This means you need 2 keys to make this work. My thinking is that this is helpful because it would allow you to bind it to a 2 position switch if you wanted. But there should probably be a toggle pause on/off option too.
Toggles have historically presented issues in FS. For example “Landing Gear Toggle” … one never could easily tell if the gear was up or down. The same would apply to a pause Toggle (to some extent), so I can see the advantages of also having a definitive ON and an OFF.
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"My Personal take as a long time PP and a former FSX beta tester (not a Fs2020 beta tester) and many years in the Aerospace Industry.
The Current “Active Pause” is a step in the right direction, but ironically NOT a step in the right “rate of change of direction”
Active Pause saves and then sets the X, Y & Z velocities to zero, It may/should probably saves the Roll, Pitch & yaw and their rates,
Whats is not doing is saving & setting their RATES to zero. ie X accel/decel, Y accel/decel etc. yaw change rate etc
It is also not saving and setting any Integration in the AP to zero, and stopping any AP processing or output changes.
Obviously, when the Active Pause is release, all the above should be restored to their values at the time of the pause.
Reasoning: Assuming Active Pause’s main purpose is to stop the Aircraft from moving, so that the pilot can “Catch up” with the plane because they are no longer ahead of the plane, and need some time to catch up or address an issue, that if they continue flying, would cause undesirable results.
Outside, the rest of the world can continue, outside the plane, time ticks by as normal, but to an outside observer the plane is Stationary.
Other smaller details may need to be addressed…
ie Engines should continue to run, fuel rate should reflect current throttle state etc, but the Fuel Quantity remaining should remain constant during the “Active Pause”.
Lots of additional details & consequences to address, but at the end of the Active Pause, the plane should “instantly” start moving in exactly the same was as the moment “Active Pause” was evoked, and all those velocities & accelerations, and AP processing should resume with those saved values.
Th only major effect therefore of an Active Pause, would be that when the plane rejoins reality, time is still real world time, resulting in an unavoidable late arrival.
In Multiplayer or say Vatsim, what observers will see is the Plane stop moving during the Active Pause, and then continue as if nothing had happened when the Active Pause is released.
AI ATC can even continue, with the pilot being able to respond appropriation, but not always able to immediately act on those commands. or Ai ATC , aware of the “Active pause” can act accordingly.
ACTIVE pause is NOT a "Real World: situation, so it may well cause a minor disruption to Multiplayer etc, but it is a chance for the Pilot in the Simulator, to correct errors, analyze the situation, get caught up and in front of the plane, before resuming “Flying”.
Mentions have been made that “Active Pause” is a tool to allow Drone Pictures to be made etc… and that is all well and good… but its functionality should also be designed so that its use does not upset the released attitude, state and stability of the aircraft etc etc.
COMPLEX… which is probably why all aspects of it have only come to light now that a large number are using it with/without per-conceived expectations.
But it’s only 4 weeks into the release, and if MS considers this should be addressed, I am sure they will, - as they were able make this work well in FSX 
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Per previous posts, don’t use active pause, use Set Pause On/Off as this achieves everything active pause does without any of the downside and so resolves all of the issues you correctly point out with active pause.
I tried that … yes, when you exit, no instability issue
BUT
When paused this way, all the instruments are paused, so you cannot really do anything (except take a Potty break)
If the purpose of pausing is to adjust your instruments (and see them adjust) … ie Tune to correct VOR, switch to Nav from Gps , change items in G1000 etc, you cannot.
I assume this is why Active pause was developed, but as I said earlier, it is not “pausing” everything it probably should.
It pauses VELOCITY (sets to zero), but it does not pause Roll, Yaw, Pitch changes, or temporarily set their derivatives to zero (ie Velocity Acceleration, rate of pitch change etc)
A PAUSE that when paused then slowly puts the aircraft into an unstable configuration while in pause, resulting in a instant change of attitude on Pause Release, is not a Pause Button – it’s a SUICIDE Button !!
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So best bet for you is to slow the sim rate down, power my other suggestion
Because this is the type of pause you have to have for multiplayer flight, which is what MS/Asobo are pushing. You cannot stop the world around you while there are other live pilots flying in that world.
The better question is, “Why didn’t they program an active pause that doesn’t result in the AP attempting to kill when you unpause?”
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Well – Yes … If you could slow the sim down enough so that over a reasonable time, nothing very much changed at that sim rate within the plane, but you could still manipulate gauges and the AP in real time… that would be great…
At the logical extreme, a sim rate of ZERO !!!
But then you want really only want to slow the Sim rate down for the plane itself, while having everything else outside the plane keep in real time, especially in MP.
So, say plane is at a sim rate of 5%, things will change a lot more slowly, but you would still want the instruments to respond in real time … ie tune to a VOR, and the Gauges respond in real time. be able to program the GPS in real time … (not at 10% normal speed !!)
The ideal solution is probably a lot more complex than is apparent from the USER point of view … if it were that simple, I am sure that MS would already have had it working and this thread would not exist.
I would see reducing the Sim to its current slowest rate, as a temporary work around, if indeed it did achieve the desired results.
Not tried it at the time of posting this … so maybe it will work - maybe it wont 
I don’t see Multiplayer as a significant issue or a reason.
Maybe don’t think of it as Pause, and the stopping of time, but rather was a Freezing of your plane in Space, but not time.
So it should have no effect on other players… its as if you have Instantly landed on an Invisible runway in the sky - Not Realistic, but a sim feature, helpful in pilot training/ learning.
The only issue may be a plane following you, crashing into you when you suddenly stopped, but that could be taken into account in MP by making your plane a “non crash object” when you are frozen.
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OK, give the 1/4 rate a go. I find it more than adequate. You can also mix and match. So slow time down, then press SET PAUSE ON [NOT active pause]. Look around the instruments, decide what you want to do etc. press SET PAUSE OFF, game still running at 1/4 speed - make the instrument chnages. SET PAUSE ON again, fly the drone around, do whatever you want, decide to chage more instruments, press SET PAUSE OFF make those changes, return to normal speed etc. You get the idea. It is pretty flexible!
That works fine (Set Pause On/Off) works great. I use keyboard P for pause and Ctrl P for off. But I found another thing (I think) that causes the same out-of-control problem when coming off the autopilot … if I use “Z” (turn off autopilot), all hell breaks loose! If I just click the button to turn it off all seems ok.
If you want to pause flying, and take a Potty break, the the normal pause is fine.
If you want to pause flying, so you can go over your instruments and make adjustments, that you see operate (like changing nav freq, tuning Vors, editing flight plan), then Active Pause is what you need.
Unfortunately Active Pause has a few Undesirable Side effects, that ASOBO should be able to fix.
(1) If autopilot is ON, it will continue to TRIM the plane, and since the plane is FROZEN in space, the AP can (and probably will) run its servos to their limit switches.
(2) Throttle (and Prop) adjustment will change your airspeed, even if you are FROZEN in space.
So when you come out of Active Pause, your AP is in limit, and your speed is not what it was when you entered Pause, typically resulting in a mus-configured aircraft and a resulting difficult situation to manually recover from
I am confident that now this has been Highlighted to ASOBO, they can fix it,.
Its actually a really easy fix !@!!
But in the meanwhile, a work around is
(1) Turn OFF the AP BEFORE entering Active pause.
(2) Do not move your Throttle, Prop or Mixture controls when in Active pause.
(3) Turn back on your AP (if needed) after you leave Active Pause (and re-configure its settings)
This is probablyly all ASOBO needs to “automate” to fix the issue.
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Interesting work around …
I just resurrected by NOSTROMO gamepad controller from early FSX days.
It occurred to me, that its Macro Programm,ing feature could be used to evoke ACTIVE Pause, and in doing so, run a macro of Keystrokes, to do things like turn off AP, before sending Active Pause keystroke to the game.
I suspect there are other Programs that could do normal keyboard Macros as well.
Keyboard macros open up a whole new wealth of possibilities !!!
To save & restore things like AP settings , external to the Sim, would probably require a significant amount of SimConnect programming, but if ASOBO never address the AP issues in Active Pause, there is another ADDON just waiting to be written !!
lol THat’s awesome. I found mine a couple of weeks ago while cleaning out some stuff, plugged it in, and it works great. I can’t get the official drivers or programming software working, but Windows recognizes it as a 10 button controller, and MSFS recognizes it as well, so that’s an extra 10 buttons, a wheel, and an extra D-pad to map.
Great – this is worth talking about to help anyone else with FS2020 and this control.
So far, I have found the same as you.
There are two Models, one made by Belkin & one made by “someone else” – both were current controller before Windows 10.
So far I have not been able to find Windows 10 drivers, but I did find the Setup App and W7 & W8 drivers.
Installed the drivers and ran the App under W8 compatibility mode,
App works, I can assign keystrokes & macros to key, but FS2020 does not see those keystrokes. 
FS2002 recognized the Controller, but like the Sidewinder 2, did not have any default presets.
(I set my own for the Sidewinder fine)
So, bottom like, I do not yet have my Nostromo Gamepad doing anything useful with FS2002.
If you do, please let everyone here know, and how you did it !@!
Unlike the Microsoft Sidewinder 2, which like Fs2020 is a Microsoft product, and should have FS2020 defaults , the Nostomo is not Microsoft, and is not a current controller, do I would not “EXPECT” default setups to be already in the sim.
The whole process of “macro programmable keypads” with FS2020 opens up some very interesting possibilities. !!!
BTW Mine is the N52, which has 3 selectable banks (Red, yellow, Green) with 11 keys in each, + the other Top hats & sliders.
Going to be a lot MORE keys to remember - the Normal keyboard is bad enough !!!
Mine is the ‘OG’ Nostromo n52, the original that Belkin released, and not the subsequent model. Windows recognizes it natively as a 10 button gamepad.
I can get the latest drivers to install, but it never sees the device as the Nostromo, only as a 10 button gamepad. Therefore, the programming software (which runs fine under Win 10) can’t see the Nostromo as being there and programmable.
I just use my Nostromo to perform less used secondary functions at the moment - lights, custom views, etc. It’s not macros, but it’s an extra 10 buttons. And you can do multi-key presses too, so if you use one of the buttons as a “shift” key, you can technically program way more than 10 functions to it.
In the setup software, bottom right, you can select specifically which controller model you have.
I assume you got it working as a native keyboard, and not with the Nostromo definded keys and macros. That’s were the real POWER of the controller will come … Macros !!!
Yeah, it doesn’t recognize it when I select the “right” model. The programming software just doesn’t see the hardware through its native drivers, only the updated MS drivers - a 10 button gamepad. I tried going in and forcing the issue - forcing windows to use the “correct” Nostromo drivers, but it still always reverts back to the Windows default driver.
So no programmability.
I called Belkin’s (oversea) Customer Service. Very nice, but of little help.
Directed me to the Driver page, but does not look as if the Windows driver will work with W10
The price of Current similar devices is “HIGH” 
Yeah, that would be the Razer controller which is basically a direct ripoff of the Nostromo, only with 4 rows of buttons instead of 2, and RGB unicorn puke out the wazoo. I can live without macros. Having an extra 18 buttons (1 as a shift + 9 buttons) plus 4 more on the D-Pad covers me nicely.