The pause action part is for creating a pause in the action lists. It's not for pausing the game.
If you want to prevent interaction then use the begin / end cutscene action parts, or the hide / show cursor action parts.
They are both the same thing more or less, but in the current public build, the begin / end cutscene action parts will hide all interfaces. In the next build you can declare which interfaces should be hidden / remain invisible during cut-scenes via the properties tab of each interface.