% Complete not including on hold milestones

This is by design. Putting a work item on hold will no longer roll up fields like effort, work, duration, % complete, etc.

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.