Has anyone experienced a glitch in Primavera P6 Team Member where you setup the project to require status update approvals, however the updates go directly into the P6 schedule without stopping for approval?

There is more information in the P6 8.x user guide, but most likely the project preferences have not been configured correctly. Here are some brief instructions on how to do so.
To configure status updates:
1) Click Projects.
2) On the Projects navigation bar, click EPS.
3) On the EPS page:
a. Select a project.
b. Click the Actions
menu and select
Set Project Preferences....
4) In the Project Preferences pane, click Team Member.
5) On the Team Member page, click the Status Reviews tab.
6) On the Status Reviews tab:
a. Select Enable review for team member status updates.