Your video shows how I expect it to work. However, when I hit Out in Vegas 12, it sets the end point but does not select the area in between (the blue shaded area between in and out). The only way it selects the area in between is if I stop playback then press Out, which is far less convenient. I use the I and O keys, I don’t click the interface button.
It almost seems like there is a setting someplace that needs to be changed. If I can find time today, I’ll take a video of it.