This is by design. Putting a work item on hold will no longer roll up fields like effort, work, duration, % complete, etc.
% Complete not including on hold milestones
If I put a milestone on hold it no longer is utilized within the % complete calculation. Can i turn that off?
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Boris is there anyway to override that?
It may be possible but it would require a complicated Workflow rule and it is not recommended. There are multiple fields that roll up in the workplan such as Work, Duration, Dates, Actual Effort, % Complete, etc and they would all need to roll up accordingly. This could cause data integrity issues and inconsistent results.