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Or you can manually pause it yourself or even simply close it.
So the answer is no.
Wallpaper Engine aims to not affect gaming performance by pausing when you have another application maximized or fullscreen. You can also make it pause when you have another application focused (useful if you are usually playing games windowed).
Edit: Avoid display sleep stop(free memory), because it could crash your computer into black screen. happened to me.
Do you perhaps have any recording programs like nvidia share/amd relive? Or any overlays? The option just closes the 3D window so it seems really strange that it causes any kind of issue like that. It could just be some kind of race condition bug in the driver though.