Ok, let me ask you this...Any of you had ever turned off the transponder on the flight for any reason? If so why?
I regularly operate within Military airspace. We turn it off (Standby) when operating within the circuit. When operating low in the training areas (definitely out of radar and transponder coverage), we turn it on but sqwark a common code.
To add (not relevant for this case), when we operate in such locations, it's known as 'flight monitoring'. I.e. the control agency will not be able to see us but know that we are somewhere in that area. We will call in every half hour to report. If we fail to do so, they will call to check. SAR will be dispatched only when we are way over due. I think this is very common for GA as well.