I have had one since November. It does the same thing. I assume it is because the tone controls are supposed to be out of the signal path at 12:00.
Sound: Pretty good. I prefer it, with Tannoy Turnberry speakers, to a Pass XP-10/XA30.5, which I didn't expect. Not too smooth or relaxed for me, even with those speakers.
But, Thefferon, here is a question for you: Do you feel some sort of resistance from the volume knob after you've turned it quickly down a certain amount? I'm going to tell myself it is somehow related to the mute function, which is designed to mute only part way.