i would just like to note that so far sephiroth control only works in slot3, so if you want to control him only put him in the party in slot3.
I agree, the same happens for me.
When assigning Sephiroth to Slot 3 with the trainer, I tried to do Curaga. This ended up killing my party except for Sephiroth, who lost a ton of hit points. Then I tried Full Cure, which instead inflicted 3000 damage to Sephiroth. Huh? What? Quite Interesting, right?