Sequences started with the KEY TRG/HOLD button are transposed by pressing a key, but this restarts the sequencer immediately..

Now, with a bit of persistence and, if you can wing it with the sound of VCO2 only, here's a trick to work around the sequencer restart:
It’s based on motion sequence recording of VCO2 PITCH. Set the recording selector to MOTION, and while pressing the desired step programming button, dial in the required VCO2 PITCH for that step (use SHIFT and dial turn for setting the pitch in a multiple of 100 cents). If a PITCH is required outside the +/- 1200 cents range, VCO2 OCTAVE can be recorded as well.
Repeat this until all desired steps have been programmed. Then set the recording selector to NOTE and program all the steps with the same base note key. Once the sequence is completed, turn VCO1 down and VCO2 up in the MIXER.
Press PLAY instead of KEY TRG/HOLD, and the VCO2 sequence will play continuously. Pressing a key will move the sequence base note to the pressed key note and consequently move VCO2 pitch along. Effectively, the sequence is transposed to the key pressed, but the sequence will not be restarted. For short 3 or 4 note sequences, this can even make do as an arpeggiator.
Not the most elegant way to get things done, but at least there is a way..
Kind regards,
Peter