I'm not a big android power user but wanted to add my $0.02.
My phone is not modified. It was purchased unlocked in Germany in July 2012.
I had no cut paste problem since July. But some point after upgrading to Jelly Bean via Kies the last week of October 2012, I noticed cut and paste has stopped working. For me it is apparently only the paste that has malfunctioned. If I click copy or cut, I get the message that the item is copied to the clipboard.
However, when I long press to paste, I only get the blue indicator arrow, but there is no "paste" to actually touch.
Most importantly, a factory reset did NOT fix the problem. It seemed to go away immediately, but again today (3 days later) I went to use C and P and the paste is gone again.
So I am not convinced a factory reset is a solution. At least not for me.
I did send a note to Samsung Germany about the problem. Hoping official complaints will get this fixed quickly.
It is definitely annoying...