Does WhenCalled create a mock object?

I have a unit test that fails if I try to mock a single method, because it seems like WhenCalled actually creates a mock, and in doing so, destroys the state of my object.

Here is a minimal example to demonstrate the problem:

using Microsoft.VisualStudio.TestTools.UnitTesting;
using TypeMock.ArrangeActAssert;

namespace TestMe
{
    public class TestMe
    {
        private static TestMe _singletonInstance;

        public static TestMe Instance
        {
            get
            {
                if (_singletonInstance==null)
                {
                    _singletonInstance = new TestMe();
                }
                return _singletonInstance;
            }
        }

        public string SomeString { get; set; }

        public void DoStuff() { }
    }

    /// <summary>
    /// Summary description for UnitTest1
    /// </summary>
    [TestClass]
    [Isolated]
    public class UnitTest1
    {
        /// <summary>
        ///Gets or sets the test context which provides
        ///information about and functionality for the current test run.
        ///</summary>
        public TestContext TestContext { get; set; }

        [TestMethod]
        public void TestMethod1()
        {
            TestMe.Instance.SomeString = "foo";

            // The following mocks the DoStuff() method but does not change Instance
            TestMe instance = TestMe.Instance;
            Isolate.WhenCalled(() => instance.DoStuff()).IgnoreCall();

            // This assert succeeds: The value of SomeString was retained
            Assert.AreEqual("foo", TestMe.Instance.SomeString);
        }

        [TestMethod]
        public void TestMethod2()
        {
            TestMe.Instance.SomeString = "foo";

            // The following line changes the object returned by the Instance method
            // In doing so, any state on the object is lost.
            Isolate.WhenCalled(() => TestMe.Instance.DoStuff()).IgnoreCall();

            // This assert fails: The value of SomeString is null
            Assert.AreEqual("foo", TestMe.Instance.SomeString);
        }
    }
}

Is this the intended behavior of TypeMock? Or is a side-effect of chaining? Or is it a bug?