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This problem has come along since 4.3. (MJ5 for me)
It only affects the stock music player as far as I'm aware. (at least this is what my tests have concluded). I've tried this on two navigation apps (google navigation and Waze) and both have the problem.
You can get around it by playing music through Google Play Music instead.
This does not pause the music, but instead carries on playing it at a very low volume in the background whilst the directions are being spoken.
I don't like the Google Music app half as much as the stock samsung music player, but at least its a work around so please let us know if anyone finds a work-around for the stock samsung music player.
This now seems to have been fixed with the release of MK8
What is MK8?
The latest firmware release