This bug has been reported on Ubuntu Launchpad as:
 https://bugs.launchpad.net/bugs/554690

Forwarded from the launchpad report:

I added the Pointer Capturer into a Drawer then I opened the drawer and clicked on the Pointer Capturer.
The mouse Locked as it is supposed to do.
Then I used the keyboard to close the drawer and then klicked with the mouse once.
I moved around the mouse and I could open applications and select things on the desktop, but there was no cursor.
I successfully opened the drawer and saw that the Pointer Capturer still was red so I clicked on it.
I could then see my cursor again.

ProblemType: Bug
DistroRelease: Ubuntu 10.04
Package: mousetweaks 2.29.92-0ubuntu1
ExecutablePath: /usr/bin/pointer-capture-applet

this is reproducable using mousetweaks 2.32.0-oubuntu1 0

If the cursor is captured without a window open, clicking on the desktop causes the pointer to be missing, however, actions can be initiated. I could click the panel items and activate them, but the cursor itself is missing. However, doing this with a window open and clicking in the window causes a curser to appear and be captured in the window. It does, however, allow the window to be closed. The cursor will not reappear until the pointer-capture-applet is unlocked.