Its fixed in iCue 3.33.246 !
When I rotate the mic up I get an extra prompt. I get 'Mic off', then 'Mic feedback off'
Rotating it down I get 'Mic on', and then 'Mic feedback on' and it stays on.
Headset firmware is still 0.02. Which is odd, I would have thought this would have been a headset firmware issue. I guess not!
iCue also seems to include a new setting called 'Auto Audio Repositioning'. This is different to the Stereo/7.1 toggle, which is still there. Any clue as to what this new setting does? I cant quite tell what its doing (sounds like the same change Turbo Boost did on my old JVC kit), but music sounds better with it enabled.