Weeell... I think I'm doing the disengaging right. When you finish using it, you push the "hook" back up so it clicks into its holder. I've fiddled with it some more and I'm pretty sure it's doing what the manual says.
What's more worrying is that this morning as I was winding bobbins, the needle was running at full speed while the bobbin wound! Yikes. Definitely something weird going on. I guess I will be checking with my dealer tomorrow, sigh...