If I attach a displaytext actionpart (with display as background text checked) on a frame of some character animation that is set to loop N-times, it terminates the animation prematurely (after the first iteration).
Is this something that is known and can be worked around or is it something
Display text will automatically trigger the talking animation of the character you specify. Background text option just means it can't be skipped & won't automatically force a cutscene event until the player left clicks or the specified time in the p tag (if you created one) is reached.
If you don't want to trigger a characters talk animation then use "display narration text" or "display object text" under the miscellaneous action parts section instead. Display object text needs to be linked to a scene object & also needs to be manually killed with another action part. Narration text works the same way as display text except you can specify the font & position on the current scene that the text should be placed.