LG TV Keyset 1
You are correct, must be a bug on that Keyset
Just tested a Sony Keyset mute works perfect.

This LG Keyset Mute toggles on and off rapidly and the volume control is a little twitchy.

The "holding the button down" command makes sense, with the problem I'm having.

I guess my TV must interpret the command so it moves, once pauses and then moves quickly.