My Aerogate II does the same thing. When you turn it down too low the RPM display begins flashing on and off, and it won't turn off the fan.
It's a PWM controller, meaning pulse width modulation. It's always supplying 12 volts, just in shorter and shorter bursts.
A Rheostatic controller would drop voltage, and would be able to drop voltage below the threshold that the fan would run at, stopping it.
Personally it doesn't matter though, because the fan is still inaudible, which was the goal.
If you'd like the fan stopped, just add a toggle switch into the fan's red wire to shut it off when you wish. I'm not familiar with the v. I, but that might set off the alarm too, as it would in mine.