When I rewind the Live TV Pause to watch what was on, it kicks off and plays the existing show. My USB has been formatted and has always worked before.
Early in the OS10 update, starting the day of the update, my Insignia RokuTV kept saying that LiveTV Pause was not Enabled when I turned the TV on in the morning. (could not Pause or Rewind) I found that by just removing the USB drive and reinserting it would then temporarily resolve issue. Occured about 5 or 6 more times during the next couple of weeks, but only upon turning the TV on. Each time I just removed USB drive and reinserted it. Seems to have settled down, I think it did it once last week. Of note, a couple of times I received the message of it being Disabled, I did nothing and the Pause/Rewind features worked fine.
Try just removing and reinserting. If unsuccessful, maybe try reformatting the USB drive.
Also, not sure if any of the OS10 update builds helped to resolve issue or if it just fixed itself for the most part. Try Settings..System...System Update...Check Now [Basically, do a manual update to ensure latest build]. My Insignia RokuTV is showing 10.0.0 build 4201 but yours may differ.
This may be due to something that I have observed with Live TV pause. In the specific case where you have allowed it to record more than 90 minutes of program material, while allowing the screen to display the real-time program, and then you rewind it all the way back to the 90 minute beginning of the recording window, I have seen the software glitch out and basically erase the 90 minutes you just recorded and drop you back into real-time watching of the live broadcast.
Is this what you are experiencing?