With my Treo700p is paired with the 2006 IS 350, I sometimes want to talk in private when other passengers are around. So I hit the "Cancel Headset" button on the treo, and the treo works like a normal phone for the duration of the call.

The IS however stays on the phone call screen, so it's clearly aware that I'm on the phone. However, as soon as I transfer the call, it starts playing music out of car speakers drowining out my conversation.

Is that how it's supposed to work? I actually expected that too happen, but was suprised to see that the car tell when I'm still on the phone, but just not using the built-in radio. However, if it can detect my call, I'd expect it to keep the music muted.

How does it work for your phones? (mention phone model if you can)