Version - 1.3.1-1282
Specs - i5 2500k @ 4.0 GHz, 11 GB RAM, GTX 660 3GB
In hardware mode, when the game is paused the entire background is grey except for the top left corner which is blurred correctly. Software mode handles this correctly, displaying the current screen blurred behind the pause screen.

Hardware -

Software -

Log - https://gist.github.com/deadair3210/3a6e1d8bbc8611583726