Yeah I think I understand, but I still don't think it's faulty.
Imagine having two distinct sections on the Screen:
1. Audio
2. Computer / Nav / Bluetooth / DSP
If you go to the Nav, then power off, turn on, I'd expect it to show you the name of the CD playing ( as there's a delay in firing up the CD), then after 3 seconds flick back to whatever you last used in Option 2 - Nav if it was last used.
Does exactly the same on mine - fires up the Ipod on my Intravee, then shows the Nav.