It did work in CS3 the way it is described in the Adobe Help:
If the audio was longer than the video then the video stopped at the last frame and the audio continued until the specified duration was reached. Then the menu (video and audio) looped to the beginning.
I have tested it myself in CS3 and it works.
Besides this also the way it is described in Help and it makes sense too.
I suppose it is a bug in CS4