I have just used GroupWise 6.5.6 to test the GroupWise Application event ItemReplyOpenItem. This works as expected, when either Replace Groupwise Item or Before Groupwise Event is specified.
It is possible that this event was broken in one of the GroupWise 6.5 service packs SP2-5. It appears to work correctly in version 6.5.6.
Can you try testing your solution on GroupWise 6.5.6?
If you wish, we could email you a diagnostic Formativ applet which displays the current GroupWise event, along with its arguments.
I hope this helps.