I have the following checksums on kat5200-0.8.1 where M.U.L.E does what you describe, same checksums with Atari800 do work correct.
5200.rom md5: 281F20EA4320404EC820FB7EC0693B38
atari800.rom md5: C07454070635C73B4BFF043122D31344
ATARIBAS.ROM md5: 0BAC0C6A50104045D902DF4503A4C30B
ATARIOSA.ROM md5: EB1F32F5D9F382DB1BBFB8D7F9CB343A
ATARIOSB.ROM md5: A3E8D617C95D08031FE1B20D541434B2
ATARIXL.ROM md5: 06DAAC977823773A3EEA3422FD26A703
M.U.L.E.atr md5: C06EF1C6223A5A32600C3FAB3EE5C02F
Seems like an emulator bug of some kind,
you can contact the autor of kat5200 here if you wish. i have contacted the author about this, if i receive a reply i will post an update.
I've seen some code relating to
multi tap MultiJoy4 support in atari800 which would indicate support for four controllers, i'll see if i can find out if it actually works.