I was using Masquerade on a local dev site a few months ago without any trouble. On a staging site, when I "mask" as another user, even one with full admin rights (which are most of them right now, as we're doing a final round of bugfixes before betatesting), I seem to get logged out entirely. (Anonymous users have a distinct Main menu, as we're making heavy use of Content Access controls.)
The Masquerade block is in the footer without any roles restrictions; at admin/config/people/masquerade, "administrator" is the only box checked, and I haven't changed anything at admin/people/permissions#module-masquerade (see attached).
I've tried adding masquerade/unswitch to the Main menu (we're not using the Navigation menu), but it doesn't appear under any circumstance I've been able to conjure up.