Hi Chris,
you are not the only one who doesn't understand this "cheap" design on an aircraft that costs x USD ! This is indeed a very weak (confusing) item in the B737 (that could have saved many lives).
The same goes for the Configuration Warning Horn in approach on Classic (not the sound but the logic). I sounds all the time and it has become a habit to disregard it and just kill the horn. I often fly Flaps 10 in approach - the next step is Gear Down Flaps 15 ; the Horn will sound again because the Flaps move very fast to 15 while the Gear is still in transit, so you can not silence the horn. Many F/O keep on knocking the Horn Cutout Switch as if the switch falters... And they feel happy when the Horn finally stops, without having understood what really caused the cutout switch to "falter"... Believe me or not, I have had 1 F/O who suggested me to write this in the ATL !
One day the Horn will sound for real but some pilots may think "the damned cutout switch doesn't work"...
Fortunately they changed this on NG. When the Horn sounds, it is for real !
Pat