Can anyone tell me when this works? I've tried to use it so many times, and I think it's actually worked for me maybe twice.
Latest public releases of everything… macOS 10.14.4 (18E226) and Xcode 10.2.1 (10E1001).
Simulator's Automatically Sync Pasteboard
Seems common beyond your example:
https://forums.developer.apple.com/thread/106140
Feel free to file bugs against the tools, being sure to add your report # to your thread for reference, thanks and good luck.