This is the case indeed. The users could publish their items. This is a bug and we were not aware of it - it has been introduced with Sitefinity 3.5.
We will try to follow up to this thread soon with a solution or a workaround. You can also downgrade or start building your project with Sitefinity 3.2SP2 Hotfix 1616 - the workflow is working as expected in this release.
We have updated your Telerik account for drawing our attention to this problem.
All the best,
the Telerik team
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