I just tried this and my test block, I also experienced the same thing. I changed the stitch length ( smallest stitch possible ) and found it worked better. I just read today that if you take the handle of your scissors and rub back en forth along the stitching it weakens the paper. Another option is to try a different brand of paper. I found that to also work better. I'm getting ready to order some Carol Doak foundation paper ( she's suppose to be the super star of paper piecing). I have a friend that uses regular copier paper all the time.. its cheaper
Hope your project turned out ok.