The same thing happened to me and 1 other player in multiplayer (there were 3 of us), also in the pumpkin woods.
Taking damage snapped the player out of the animation and he/she could continue normally.
However, I found that there are some other lag/desync problems seemingly connected to the hosts internet
connection speed, which may or may not be related to this issue.
Specifically, when I was acting as host the 2 other players (again, total of 3) would suddenly experience severe
lag/desync, and my internet connection would drop momentarily (also affecting other computers behind the same
router), at which point I observed a sudden burst of data uploading to the clients (originating from SoG), totalling 1MB/s (my connection is only capable of ~110kB/s upstream). The other parties also noted a loss of connection (3-way Skype call disconnected). We restarted several times, all attempts yielding the same result.
This did not appear to happen with only 1 other player joining me.
To see if a host with a faster connection (~230kB/s upstream) would alleviate the problem, my friend hosted the
game, and we stopped experiencing the issues described above (inlcuding the fishing bug). We did, however, seem
to gradually go out of sync during extended play (at least from the hosts perspective).
It should be noted that I'm running a pfSense router, and my friend uses an ASUS RT-N56U, though I've never
experienced any such issues with other games/applications.