I can confirm the bug. It’s important to mention that the problem don’t exist if one uses old versions of jQuery (for example 1.8.3) and old version of jQuery UI (for example 1.8.24). I prepared the demo which uses the old versions of jQuery and jQuery UI and it seems to work without any problems.

Then I get the last version of jQuery UI Multiselect plugin from github and made some small changes to use [selected] selector. I changed two lines of jqGrid code too to do the same. As the result the code seems to work for both new jQuery (1.11.1) and new jQuery UI (1.11.0): the new demo. It’s important to remark that the demo which uses modified ui.multiselect.js and modified jqGrid works with old versions of jQuery (1.8.3) and jQuery UI (1.8.24).

The modification which I made in jqGrid was replacing the line

to the line

and replacing the line

to the line

 In the same way I modified the line 

of ui.multiselect.js to the following line

and another lines 

to the lines

One can get the modified version of ui.multiselect.js here.

Best regards
Oleg