A lot of time it spawns right as the level starts, srpite or not. I think it's more about not recognizing certain sprites as sprites than this being inconsistent. It's consistent in not recognizing some sprites, and recognizing others. Tried it with 5 or 6 custom sprites, it worked only with one.
This has been so useful in my latest projects because it can easily be made to spawn other things besides pipes just by editing the Map16 table. I've used it to spawn Yoshi Coins, "unlock" boss doors, and make blocks disappear in 2x2 squares.
Approved since the update just added the json files. Note that the ExGFX provided is only needed to have the correct graphics show up in Lunar Magic (the sprite works fine without it), so if you need something else in SP4 don't insert it. Tested with LM 3.10, pixi 1.2.12.