Just tried this here too and found the same problem.
Although it's not been an issue for me yet (or I would have complained)
I can see that for sound design it could be seen as essential and will probably effect me at some point soon too so a solution would be great.
It would be very useful for "scrubbing" the item (via dragging the edit cursor) so we can see the changes in more detail. We asked for this with midi CCs ages ago and now they work a treat so should be able to have it with items too (but it might need a special mode)
It's probably not updated currently due to reaper being able to "buffer" these item effects offline in such a way that they take up less CPU.
I did try various things to make the effects "live" but they didn't work.
Hopefully the devs will have a look at this at some point.
A way round this could potentially be to use the new subprojects system to put your effects on the tracks inside the subproject and then have the rendered subproject item in the master project behaving like a normal item. That way you can still "seek" with updating automation.
We do all our game SFX now in these subproject containers as they have massive benefits for certain ways of working. There are good threads on these below (and a FR thread in my sig)
http://forum.cockos.com/showthread.php?t=168985
http://forum.cockos.com/showthread.php?t=169086
Also, a few of us have asked a few times now for the "delta"/difference between where the item was and where it is being moved to to be shown in the tooltip so hopefully that will get put in too at some point. fingers crossed