Dear Abu,
As the title say, the two options are not working together.
To reproduce the bug you can do the following:
$grid[“reloadedit”] = true;
$g->set_options($grid);
… and then the js steps for persistent settings: 
<!– library for persistance storage –>
<script src=”../../lib/js/state/jstorage.min.js” type=”text/javascript”></script>
<script src=”../../lib/js/state/json2.min.js” type=”text/javascript”></script>
<script src=”../../lib/js/state/jqGrid.state.js” type=”text/javascript”></script>
(yeah, I have them locally, but doesn’t matter, for the subject in question)
and, of course, the js part, as described in your demo:
<script>
var opts = {
“stateOptions”: {
storageKey: “gridState-list1”,
columns: true, // remember column chooser settings
selection: true, // row selection
expansion: true, // subgrid expansion
filters: true, // subgrid expansion
pager: true, // page number
order: true // field ordering
}
};
</script>
Or you can simply add 
$grid[“reloadedit”] = true;
$g->set_options($grid);
to the persistent settings demo.
Then the following happens:
When you edit a row (inline or not, doesn’t matter), if you hit enter, the row doesn’t go out of the edit state (even though the database is updated), and you have the following message in the console:
Uncaught jqGrid – No such method: undefined
ajax @ jquery.min.js:4
saveRow @ jquery.jqGrid.min.js:398
jqGrid @ jqGrid.state.js:383
(anonymous) @ jquery.jqGrid.min.js:390
dispatch @ jquery.min.js:3
r.handle @ jquery.min.js:3
​I tried to dig in this like three days, found a few things, but I didn’t manage to correct it. Yeah, I’m not very good in JS. It’s too messy for my taste. 🙂
As a temporary solution I put “reloadedit” on false, and just trigger the refresh whenever I really need it.
Kind regards,
Andrei.