Think I bought a dud

It's a reasonable feature for the convenience of those with no manual lenses. It effectively lets you know when you've accidentally taken the lens off "A". I suspect that's what Pentax had in mind.

It's confusing, though, for beginners trying to use manual lenses.

IIRC the *istD originally shipped without this feature, it was a firmware hack to make it possible in the first place.

Since it's a low priority capability (as demonstrated by the continuing annoyance of inacurate metering with non-A lenses) it's probably just never occured to anyone to change it from the way it was in the firmware update to the *istD.