Hi ,
I was able to talk to a developer about this and he said the way the tool is mean to be used is by blending with an existing animation. So, as you approach 1 the blend is more controlled by physics, as you reduce the blend towards 0 the animation influences the movement more until you reach 0 where movement is completely driven by the animation.
Because there is no animation present, it reacts in a unpredictable manner as you move from one down to zero. Although this has not been perfected yet, it is not necessarily considered a bug either and the developers are aware of this.