Application does not work when MacBook is connected to inactive display?

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I apologize in advance if I am misunderstanding the purpose of this issue 
reporting tool and if this is not the right place/ format for my report.

I am using an Early 2011 MacBook Pro running Mountain Lion (10.8.2) with 
NoSleep version 1.3.1 connected to a Mid-2010 iMac via Mini DisplayPort cable 
as its primary display when closed (Target Display Mode).

PLEASE NOTE, when the MacBook Pro is NOT connected to the iMac, this 
application works as expected, and never enters sleep mode.

However, with NoSleep running on the MacBook Pro, when I exit Target Display 
Mode on the iMac (but keeping the Mini DisplayPort cable connected between the 
two), the MacBook Pro goes to sleep after a few seconds, as I can see the 
indicator light change from steady white to a pulse. When I click the 
mouse/keyboard connected to the MacBook Pro, I can see the indicator light go 
steady for a moment as if it is waking up, but then it goes back to pulsing 
after a few moments.

If I disconnect the Mini DisplayPort cable, the light almost immediately goes 
to a constant steady, and it appears that NoSleep is "kicking-in" and waking 
the MacBook Pro from the unintended sleep. When I plug the cable back in, the 
computer goes back to sleep within a few seconds.

The use case here is that I need the MacBook Pro to stay awake while I am 
actually using the iMac that serves as its primary display, without having to 
physically disconnect the cable between the two. I need the MacBook Pro to 
maintain network connectivity so I can still transfer files between the two 
using the iMac (this also applies for any other remote computer trying to 
access the MacBook Pro), which is lost when the MacBook goes to sleep.

It seems like this is a bug that somehow forces the MacBook Pro to sleep ONLY 
when it senses there is an inactive display connected to its Mini 
DisplayPort/Thunderbolt port. Because I do not have a non-iMac external 
display, I cannot confirm if this issue exists for other displays, but it seems 
plausible.

Any help you can provide on this will be greatly appreciated! If this gets 
resolved, I have found a way to use an iMac as a display for itself or one of 
two other connected computers, with just one keyboard and mouse that controls 
whichever one is currently displayed on the screen, all controlled by either 
the click of a physical button or keyboard shortcut (depending on which machine 
you are switching to/from).

Original issue reported on code.google.com by donaldp...@gmail.com on 12 Oct 2012 at 6:11