My TF works the same way re: the mute. I gave my opinion of this "feature" to Dave. The tuner out is essentially another input jack in parallel, and therefore gets muted along with the main input jack.
Yeah, Dave must have designed the Effects loop jack to also serve as the input jack for very high output active basses too. If you plug your bass into the tuner jack it functions like a -12 db input jack.
I actually use the mute switch every gig when changing from one bass to the other (to keep from having to remember my settings on the level or master controls).