Peter, I have a glitch for the developers.
The new modify motion feature in iClone 5.4 does not blend well into other animations. It's a cool feature, but I ran into problems doing the following:
I created a walk using the right-click menu. I then cut the resultant motion into thirds. I selected the middle third and modified using the modify panel. When I hit play, the avatar walked the first part and second part (modified) correctly. When the avatar came to the third section it translated sideways and then translated back to the beginning of the third clip, and then animated properly.
I tried it with a gizmo selected and scrubbed the timeline so I could get a better idea of what was going on, and noticed that on the modified section of motion, the gizmo stopped moving until the avatar had traversed the modified section, then moved to the beginning of the last section and was moving with the avatar again.
It looks like the root is not driven in a modified sequence, and then must "catch up". With no transition (not a very pretty option), the glitch is only a flash. But with a reasonable transition, the avatar slides sideways for the length of the transition.

I assume it's because its the motion puppet in disguise which has never allowed for the root to actually translate, but requires an avatar be connected to a path rather than using the right click menu for walking.
I do hope that the motion Modify and the Motion Puppet can allow the root to move in the future.