If you start a playback from the Recordings, then hit back it shows up in PiP. If you select Watch again, it goes to full screen. However, it pops up the choice between continue or start over. I don't think the menu is necessary in this case (as it is already playing). If you want to keep it, hitting continue causes the playback to reload instead of just closing the menu. That causes a blip in playback that probably isn't necessary.
Thanks,
Josh
The same behavior also happens from Library and Shows.
More to add in the same line of topic. If you start playing a recording, then hit back (trigger PiP), then hit Live TV, it messes up the progress bar and trick play. Basically, you have to get out of the video and restart/resume it (without PiP being triggered) to restore functionality.