The version you uploaded works great.
What the video shows is that after quitting the app, you're relaunching it from icon, which by default starts the application from the beginning. If you quit the app and tap the back button, you'll see the activation/deactivation working as expected.
The functionality that you've described and want to achieve is called 'Fast Resume'. You can find more info here: http://msdn.microsoft.com/en-us/library/windowsphone/develop/jj735579(v=vs.105).aspx
. To enable fast resume, open up WMAppManifest.xml and add ActivationPolicy="Resume" to the DefaultTask element. E.g.
<DefaultTask Name ="_default" NavigationPage="MainPage.xaml" ActivationPolicy="Resume"/>
It's important to note that you don't have to add this to pass certification.
Thanks for trying out Mortar Melon :D