Looking in FCOM 1, it says there are 2 different types of transponder fit for the 320/321. Both have a facility to switch off mode C, whether you have the twiddly-knob one, or the more hi-tech button pressing version!! So there is a way of doing it - and no disrespect to the chaps/chapesses involved - they must have been unable to see it.
Having said that - from what I remember from flying school, I think all Mode C capable transponders have to have an "Alt Reporting Off" switch - just in case the Mode C is reading incorrectly, to avoid confusing the controllers as you say.
Cheers!!
[This message has been edited by SLT (edited 26 April 2001).]