I have an update. I was able to perform the glitch consistently but there is one downside. I only found the glitch to work only after you complete Tower of Treasure. However, I am still experimenting to make the glitch work before completing the level. On my stance, this glitch can be done in runs of Tower of Treasure only, but not yet for Any%.
I'll upload a raw video of me glitch hunting in Tower of Treasures hopefully later this week.
I have been trying to re-trigger the pause glitch with different results. I don't really know how it ended up with a skip but I am still looking into it. If I do eventually get it again, i'll make a follow-up video or post (possibly showing how to do it). (update: just triggered it again, but I don't know what causes the glitch.)
Found a potential glitch I witnessed while experimenting with pausing. This needs to be looked at further...